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THE

Ontario Law Reports.

CASES DETERMINED IN THE COURT OF APPEAL
AND IN THE HIGH COURT OF JUSTICE
FOR ONTARIO.

1912 .

REPORTED UNDER THE AUTHORITY OF THE

LAW SOCIETY OF UPPER CANADA

VOL. XXVI.

EDITOR :

EDWARD B. BROWN, K.C.

TORONTO :

CANADA LAW BOOK COMPANY, Limited,
Law Book Publishers
32-34 Toronto St.

1912

JUDGES

OF THE

COURT OF APPEAL

DURING THE PERIOD OF THESE REPORTS. •

The Hon. Sir Charles Moss, C.J.O.

“ “ James Thompson G arrow, J.A.

“ “ John James Maclaren, J.A.

“ “ Richard Martin Meredith, J.A.

“ “ James Magee, J.A.

JUDGES

OF THE

HIGH COURT OF JUSTICE

DURING THE PERIOD OF THESE REPORTS.

King’s Bench Division.

The Hon. Sir Glenholme Falconbridge, C.J.K.B.
“ “ Byron Moffatt Britton, J.

“ “ William Renwick Riddell, J.

Chancery Division.

The Hon. Sir John Alexander Boyd, C., K.C.M.G.
“ “ Francis Robert Latchford, J.

“ “ William Edward Middleton, J.

Common Pleas Division.

The Hon. Sir William Ralph Meredith, C.J.C.P.
“ “ James Yernall Teetzel, J.

“ “ Hugh Thomas Kelly, J.

Exchequer Division.

The Hon.

u a
u u

Sir William Mulock, C.J.Ex.D., K.C.M.G.
Roger Conger Clute; J.

Robert Franklin Sutherland, J.

Unattached.

The Hon. Haughton Lennox, J.

MEMORANDA

The Honourable Sir Charles Moss, Chief Justice of Ontario,
died at Toronto on the 11th October, 1912.

In Hilary Term, 1912, the following gentlemen were called to
the Bar: —

James Miles Langstaff (with honours, gold medal, and
Chancellor Yan Koughnet Scholarship).

Archibald Cochrane.

Bernard Collins.

William George Jackson (with honours).

Montalieu Nesbitt.

LeRoy Eaton Awrey.

Welbern Graham Atkin.

John Boyd Hopkins.

Philip Grattan Kiely.

Daniel Western O’Sullivan.

Thomas Hamilton Simpson.

Charles Watson Widdifield.

Yernon Joseph C allen.

William Cedric Davidson.

George Reece Kappele.

George Keogh.

Hedley Clark Macklem.

George Francis Rooney.

Stanley Howard Slater.

Hyacinthe Reinhold Yalin.

Francis James Foley.

William Yincent Carey.

Norman Baillie Worm with.

John Charles McKay MacBeth.

VIII

MEMORANDA.

James Henry Oldham.

Herbert Bethune Daw.

Alexander Murray Garden.
Arthur Burgess Turner.

John Hylton Cavell.

John Cowan Jr.

Hugh Percival Adams Edge.
Maurice James Folinsbee.

Howard Kilbourne Harris.

Hugh Leonard O’Rourke.

Edgar Fraser Raney.

Ephraim Frederick Singer.

John Richard Oorkery.

Harry VanWyck Laughton.
Clarence Lorne Fraser.

George Gilbert Thrasher.

William Joseph Goodwin.

■Edgar Rodolphe Eugene Cpievrier.
Samuel Max Mehr.

Henri Gustave Smith.

ERRATA

Page 163, 2nd line of head-note, for “general” read “funeral.”

“ 419, 11th line from the bottom, the last word on the line should be

“senior” — not “junior.”

CASES REPORTED.

Adams v. Gourlay
Allen, Scott v. . . .

...(D.C.)

Anglo-Canadian

Mortgage

Corporation, Powell-Rees

Limited v

. . . (Chrs.)

Auger, Re

...(D.C.)

Bailey, Beatty v. .

...(D.C.)

Bank of Montreal, Freeman
v

Beatty v. Bailey (D.C.)

Bethune v. The King

Blyth, Village of, and Town-
ship of McKillop, Re. . . .

(C.A.)

Britnell, Rex v (C.A.)

Brussels, Village of, and Mc-
Killop Municipal Tele-
phone System, Re... (C.A.)

Buchner, Fidelity Trust Co.
v

Cameron, Rudd v. . ..(D.C.)

Campbell, Jarrett v. . (Chrs.)

Canadian Pacific R.W. Co.,
Pattison v (C.A.)

Canadian Pacific R.W. Co.,
Stone v (C.A.)

Canadian Railway Accident
Insurance Co., Wadsworth
v (D.C.)

Canadian Shipbuilding Co.,
Re

Carson, Sibbitt v

Carter, Young v

Clark v. Loftus (C.A.)

Cohen, Rex v (C.A.)

Constantine au and Jones, Re
(Chrs.)

Cox, Underwood v. . . (D.C.)

Crowe, Maloughney v

Denton, Re (D.C.) 294

Dinnick and McCallum, Re
(D.C.) 551

Employers’ Liability Assur-
ance Corporation, Wallace
v (C.A.) 10

Fidelity Trust Co. v. Buch-
ner 367

Fraser, Re (C.A.) 508

Fraser, McCormick v.(C.A.) 508
Fraser v. Robertson. .(C.A.) 508
Freeman v. Bank of Mont-
real 451

Fremont v. Fremont. . (D.C.) 6

Galbraith, Rice v (D.C.) 43

Gourlay* Adams v 87

Grand Trunk R.W. Co.,

Robinson v 437

Grand Valley R.W. Co.,
Wood v 441

Hamlink, Re Rex v. . . (D.C.) 381

Honan, Rex v (C.A.) 484

Huegli v. Pauli 94

Hunter v. Richards . . (D.C.) 458

Hutchinson, Re (Chrs.) 113

Hutchinson, Re (D.C.) 601

Imperial Paper Mills of
Canada Limited v. Quebec
Bank (C.A.) 637

571

490

404

145

451

145

117

136

29'

367

154

410

121

564

585

576

204

497

160

303

579

Xll

CASES REPORTED.

[VOL.

Jardine, Perryman v. . (D.C.) 323
Jardine, Pukulski v..(D.C.) 323
Jarrett v. Campbell . . (Chrs.) 83
Jones, Re Constantineau and
(Chrs.) 160

Kennedy v. Kennedy 105

Kerley v. London and Lake
Erie Transportation Co. . . 588
Kuula v. Moose Mountain
Limited (Chrs.) 332

Livingston v. Livingston . . . 246

Loftus, Clark v (C.A.) 204

London and Lake Erie
Transportation Co., Ker-
ley v 588

London Guarantee and Acci-
dent Co., Youlden v 75

McCallum, Re Dinnick and

(D.C,) 551

McCormick v. Fraser. (C.A.) 508!

McGill Chair Co., Re 254 j

McKillop Municipal Tele-
phone System, Re Village
of Brussels and .... (C.A.) 29

McKillop, Township of, Re

Village of Blyth and

(C.A.) 29

MacMahon v. Railway Pas-
sengers Assurance Co. . . .

(Chrs.) 430

McMulkin v. Traders Bank

of Canada (D.C.) 1

Maloughney v. Crowe 579

Matthew Guy Carriage and

Automobile Co., Re 377

Maybury v. O’Brien. (C.A.) 628
Malancthon Board of

Health, Rich v (D.C.) 48

Mercer, Re 427

Merchants Bank of Canada

v. Thompson (C.A.) 183

Moose Mountain Limited,

Kuula v (Chrs.) 332

Morton, Rex ex rel., v.

Roberts (Chrs.) 263

Morton, Rex ex rel., v.

Rymal (Chrs.) 263

Mountain, Re (C.A.) 163

Munro’s Case 254

National Trust Co. v. Trusts

and Guarantee Co 279

Northern Crown Bank,
Townsend v 291

O’Brien, Maybury v. . (C.A.) 628

Pattison v. Canadian Pacific

R.W. Co (C.A.) 410

Pauli, Iiuegli v 94

Perryman v. Jardine. .(D.C.) 323
Playfair, Thomson v. . (C.A.) 624
Powell-Rees Limited v.
Anglo-American Mortgage

Corporation (Chrs.) 490

Pukulski v. Jardine. .(D.C.) 323

Quebec Bank, Imperial
Paper Mills of Canada
Limited v (C.A.) 637

Railway Passengers Assur-
ance Co., MacMahon v.

(Chrs.) 430

Rex, Bethune v 117

Rex v. Britnell (C.A.) 136

Rex v. Cohen..* (C.A.) 497

Rex v. Hamlink, Re. . (D.C.) 381

Rex v. Honan (C.A.) 484

Rex v. Sovereen (C.A.) 16

XXVI.] CASES REPORTED. Xlii

Rex ex rel. Morton v. Ro-
berts (Chrs.) 263

Rex ex rel. Morton v. Ry-

mal (Chrs.) 263

Rice v. Galbraith. . . . (D.C.) 43

Rich v. Melancthon Board

of Health (D.C.) 48

Richards, Hunter v. . (D.C.) 458
Roberts, Rex ex rel. Morton

v (Chrs.) 263

Robertson, Fraser v. . (C.A.) 508
Robinson v. Grand Trunk R.

W. Co 437

Rudd v. Cameron (D.C.) 154

Rymal, Rex ex rel. Morton
v (Chrs.) 263

Sanderson and Saville, Re . .

(D.C.) 616

Scott v. Allen (D.C.) 571

Sibbitt v. Carson 585

Sovereen, Rex v (C.A.) 16

Sproat, Zimmerman v 448

Stone v. Canadian Pacific R.

W. Co (C.A.) 121

Thompson, Merchants Bank

of Canada v (C.A.) 183

Thomson v. Playfair . (C.A.) 624
Toronto, City of, and Tor-
onto R.W. Co., Re. (C.A.) 225

Townsend v. Northern

Crown Bank 291

Traders Bank of Canada,

McMulkin v (D.C.) 1

Trusts and Guarantee Co.,
National Trust Co. v. . . . 279

Underwood v. Cox. . . (D.C.) 303

Wadsworth v. Canadian
Railway Accident Insur-
ance Co (D.C.) 55

Wallace v. Employers’ Lia-
bility Assurance Corpora-
tion (C.A.) 10

Wentworth, County of, v.
Township of West Flam-

borough (C.A.) 199

West Lome Scrutiny, Re . . .

(C.A.) 339

Wood v. Grand Valley R.W.

Co 441

Youlden v. London Guar-
antee and Accident Co. . . 75

Young v. Carter 576

Zimmerman v. Sproat

448

CASES CITED

Name of Case.

Aas v. Benham

Accident Insurance Co. v. Crandal. . .

Adams v. McBeath

Adamson v. Armitage

yEtna Life Insurance Co. v. Vandecar. ;
Agricultural Savings and Loan Co. v.
Liverpool and London and Globe

Insurance Co

Aikins v. Blain

Alderson v. Maddison

Aldin v. Latimer Clark Muirhead &

Co,

Allan v. Clarkson

Allcord v. Skinner

Allen v. Wentzell

Allison v. McDonald

Almada and Tirito Co., In re

Amos v. Chadwick

Amys v. Barton

Anable v. Fidelity and Casualty Co.

of N.Y

Ancient Order of United Workmen of

Quebec v. Turner

Andrews ; Re

Andrews v. Calori

Angus v. Dalton

Anon

Argles, Re

Arkwright, Ex p

Askew v. Manning

Astley v. Earl of Essex

Atcheson v. Grand Trunk R.W. Co. . .
Athenaeum Life Assurance Society v.

Pooley

Atkinson v. Casserley

Atkyns v. Pearce

Attorney-General v. Acton Local

Board

Attorney-General v. Bishop of Chester

Attorney-General v. Gaskill

Attorney-General v. Hamilton Street

R.W. Co

Attorney-General v. Harrison

Attorney-General v. North Metropol-
itan Tramways Co

Attorney-General v. Read

Attorney-General for Ontario v. Ham-
ilton Street R.W. Co

Attorney-General for Ontario v.

Woodruff

Atwood v. Atwood. .

Atwood v. Crowdie

Avril v. Mordant

Ayers v. South Australian Banking
Co

Where Reported. Page.

[1891] 2 Ch. 244, 255 246, 249

120U.S. 527 70

27 S.C.R. 13 206

19 Yes. 416 177

86 Fed. Repr. 282 10

3 0.L.R. 127 80

13 Gr. 646 450

7 Q.B.D. 174 625

[1894] 2 Ch. 437 478

17 Gr. 570 653

36 Ch.D. 145 309

7 E.L.R. 575 207

20 A.R. 695 147

38 Ch.D. 415 258

4 Ch.D. 869 337

[1911] W.N. 205 79

63Atl.Repr.92, 74N.J.L.686. .10, 13

44 S.C.R. 145 374

2 A.R. 24 569

38 S.C.R. 588 630

3 Q.B.D. 85, 4 Q.B.D. 162. . .470, 471

6 Gr. 632 371

10O.W.R. 801 602

3 Mont. D.& DeG. 129 450

38U.C.R. 345 271

L.R. 18 Eq. 290 93

1 O.L.R. 168. . 125

3 De G. & J. 294 650

22 O.L.R. 527 252

26 L.J.C.P. 252 572

22 Ch.D. 221 474

1 Bro. C.C. 444 176

20 Ch.D. 519, 528 432

24 A.R. 170 590

12 Gr. 466 472

[1892] 3 Ch. 70 494

2 Mod. 299 275

[1903] A.C. 524 590

15 O.L.R. 416, [1908] A.C. 508. . . 4

15 P.R. 425, 16 P.R. 50 6, 7, 9

1 Stark. 483 183, 184, 194, 197

3 L.J.N.S.K.B. 148 325

L.R. 3 P.C. 548 649

XY1

CASES CITED.

[VOL.

Name of Case.

Where Reported.

Page.

Bacon v. Proctor T. & R. 31 181

Baker v. Baker 6 H.L.C. 616 120

Baker v. Dawbarn 19 Gr. 113 407

Ball v. Parker 39 U.C.R. 488 572, 575

Bank of Toronto v. Perkins 8 S.C.R. 603 650

Barraclough v. Cooper [1905] 2 Ch. 121 ( n ) 300

Barrett, Re 5 A. R. 206 569

Barry v. Barry 1 Molloy 210 372

Barry v. Barry [1901] P. 87 7

Barry v. Butlin 2 Moo. P.C. 480 215, 223

Bassano v. Bradley [1896] 1 Q.B. 645 401

Baxendale v. McMurray L.R. 2 Ch. 790 461

Baxter v. London County Council. ... 63 L.T.R. 767, at p. 771 52

Bealey v. Shaw 6 East 208 461

Beard v. Westcott 5 Taunt. 393 175

Beatty v. Beatty 1 O.W.N. 243 7

Beck’s Case . L.R. 9 Ch. 392 258

Bedfordshire, Justices of, v. Commis-
sioners for Improvement of

Bedford 7 Ex. 658 556

Behn v. Bumess 3 B. & S. 751 477

Bell v. Rowe 26 Yict. L.R. 511 151

Bellerby v. Rowland & Marwood’s

Steamship Co [1902] 2 Ch. 14 261

Benor v. Canadian Mail Order Co. ... 10 O.W.R. 1091 377, 381

Bewick, In re [1911] 1 Ch. 116 175, 179

Bibby v. Davis 1 O.W.R. 189 48, 50

Bicknell v. Grand Trunk R.W. Co. ... 26 A.R. 431 437, 439

Biffin v. Bignell 7 Ex. 877 7

Birch, In re 15 C.B. 743 399, 401

Birmingham Dudley and District

Banking Co. v. Ross 38 Ch.D. 295 471

Birney v. Toronto Milk Co 5 O.L.R. 1 378

Bisdee, Ex p., In re Baker 1 Mont. D. & DeG. 333 451

Bishop v. Bishop [1897] P. 138, at p. 149 7

Bishop v. Bishop 10 O.W.R. 177 623

Bishop v. Pentland 7 B. & C. 219, at p. 223 69

Black v. Delaware and Raritan Canal

Co 22N.J. Eq. 130, 402 593

Blackburn v. McCallum 33 S.C.R. 65 175, 177

Blackburne v. Somers 5 L.R. Ir. 1 461

Blake v. White 1 Y. & C. (Ex.) 420, 426 185

Bohan v. Galbraith 13 O.L.R. 301, 15 O.L.R. 37 625

Bolton Partners v. Lambert 41 Ch.D. 295 625

Bonar v. Macdonald 3 H.L.C. 226, 238 185

Bonner v. Bonner 13 Ves. 379 89

Book v. Book 32 O.R. 206, 1 O.L.R. 86 206

Booth v. Ammerman 4 Bradford (N.Y. Surr.) 129, at

p. 133 120

Booth v. Ratte 21 S.C.R. 637, 643 623

Bothwell v. Burnside, Re 31 O.R. 695 391, 395, 396

Boultbee v. Burke 9 O.R. 80 572, 575

Bowen, In re [1893] 2 Ch. 491 177

Boyle and Young, Re 1 Mining Commissioner’s Cas. 1. . 618

Boyse v. Rossborough 6 H.L.C. 2 309

Bradley v. Elliott 11 O.L.R. 398 624, 629

Brady v. Chicago and Great Western

R.W. Co 114 Fed. Repr. 100 426

Brady v. Sadler 17 A.R. 365 459, 476

Brandao v. Barnett 12 Cl. & F. 787 184

Brennan v. Cameron 1 O.W.N. 430 3

Brice v. Munro 12 A.R. 453 323, 325, 330

XXVI.]

CASES CITED.

XVII

Name of Case.

Bridge, In re

Bristol Cardiff and Swansea Aerated

Bread Co. v. Maggs

Britton v. Fisher

Brocklebank, Ex p

Bronson and Canada Atlantic R.W.

Co., Re

Brow v. Boston and Albany R.R. Co.

Brown v. Peck

Brudenell v. Elwes

Brunswick, Duke of, v. Harmer

Brunton v. Electrical Engineering

Corporation

Buckinghamshire, Earl of, v. Drury. .

Bullen v. Denning

Burchell v. Gowrie and Blockhouse

Collieries Limited

Burfoot v. DuMoulin

Burkinshaw v. Nicolls

Burland v.- Earle

Burnaby v. Equitable Reversionary

Interest Society

Burrows v. Lang

Burrell, In re, Burrell v. Smith

Busk v. Royal Exchange Assurance

Buxton v. Rust

Where Reported. Page.

1 Cr. & Ph. 338, 347 546

44Ch.D. 616 625

26 U.C.R. 338, at pp. 339, 340. . . 185
6 Ch.D. 358, 359 454

13 P.R. 440 400

157 Mass. 399 426

1 Eden 140 93

1 East 442 175

14 Q.B. 185 154, 155, 158, 159

[1892] 1 Ch. 434 650

2 Eden 60, 71 454

5 B. & C. 842, 850 648

[1910] A.C. 614. . . .43, 44, 45, 585, 587
21 O.R. 583 509

3 App. Cas. 1004 256

[1902] A.C. 83 380

28 Ch.D. 416, 424 454

[1901] 2 Ch. 502, 510 473

L.R. 7 Eq. 399 145, 148, 152, 153

2 B. & Aid. 73 68

L.R. 7 Ex. 279 630

Cadaval v. Collins 4 A. & E. 858. . . .

Calder and Hebble Navigation Co. v.

Pilling 14 M. & W. 76. . .

Callisher v. Bischoffsheim L.R. 5 Q.B. 449. .

Cameron v. Spiking and Teed 25 Gr. 119

Campbell v. Dennistoun 23 C.P. 339

Campbell v. Royal Canadian Bank. . . 19 Gr. 334

Canada Permanent Loan and Savings

Co. v. Ball 30 O.R. 557

Canadian Camera and Optical Co., Re. 2 O.L.R. 677

Canadian Casualty and Boiler Insur-
ance Co. v. Boulter 39 S.C.R. 558. . . .

Canadian Casualty and Boiler Insur-
ance Co. v. Hawthorne 39 S.C.R. 558. . . .

Canadian Northern R.W. Co. v.

Anderson 45 S.C.R. 355

Canadian Pacific R.W. Co. v. Rosin. . . 2 O.W.N. 610. . . .
Canadian Railway Accident Insurance

Co. v. Haines 44 S.C.R. 386

Carne v. Long 2 DeG. F. & J. 75

Carpenter v. Canadian Railway Acci-
dent Insurance Co 18 O.L.R. 388. . . .

Carr v. Lynch [1900] 1 Ch. 613. . .

Carslake v. Mapledoram 2 T.R. 473

Carter v. Boehm 3 Burr. 1905

Carter v. Foley-O’Brien Co 3 O.W.N. 888

Cartwright v. Cartwright 12 O.L.R. 272. . . .

Cave v. Hastings 7 Q.B.D. 125

Central Bank, Re 21 O.R. 515

Chadburn v. Moore 61 L.J.Ch. 674. . . .

Chaddock v. British South Africa Co. [1896] 2 Q.B. 153. .

Chamberlayne v. Brockett L.R. 8 Ch. 206. . .

Chaplin v. Hicks [1911] 2 K.B. 786.

309

599, 600

308, 310

625

626

.404, 405, 407, 408

185

.279, 289, 565, 570

57, 69

125

628, 629

105, 108, 109

75, 80

626

401

511

334

207

626

653

629

495

173, 175, 176, 181
447

B XXVI. O.L.R.

XVIII

CASES CITED.

Name of Case.

Chapman and City of London, Re ... .

Cherry v. Mott

Ching v. Jeffery

Chisholm v. Chisholm

Christ’s Hospital v. Grainger

Christian v. Poulin

Christopherson v. Naylor

Clark, In re

Clark v. Clark

Clarke v. Sarnia Street R.W. Co

Clarkson v. McMaster & Co

Clarkson v. Sterling

Clayton v. Corby

Cleaver v. Mutual Reserve Fund Life

Association

Clover Clayton & Co. Limited v.

Hughes

Cochrane, In re

Cockburn, Re

Coles v. Trecothick

Colledge v. Pike

Collins v. Kilroy

Columbia Insurance Co. v. Lawrence. .
Commerce et 1’ Industrie en France,
Societe Generale du, v. Johann

Maria Farina & Co

Congreve v. Palmer

Connecticut Mutual Life Insurance Co.

v. Jacobson

Conway v. Guelph and Goderich R.W.

Cooke v. Stratford

Cooper v. Hubbuck

Cork and Bandon R.W. Co. v. Goode.

Cormier, Ex p

Cornwall v. Cornwall

Cornwall Furniture Co., Re

Cort v. Winder

Coulson v. Disborough

Coulthurst v. Carter

Cox Moore v. Peruvian Corporation

Limited

Coyne v. Lee

Crane, In re

Creamer v. West End St. R.W. Co. . .

Crosby v. Ball ,

Croskery, Re

Crossley & Sons Limited v. Lightowler

Crow v. Wood

Cumming, In re

Cummings and County of Carleton,
Re

[VOL.

Where Reported. Page.

19 O.R. 33 391

1 My. & Cr. 123 175

12 A.R. 432 184, 185

40 S.C.R 115 116, 602, 607

16 Sim. 83, 1 Macn. & G. 460. . 174, 176

1 O.W.R. 275 207

1 Mer. 320 295, 297, 298

8 O.L.R. 599 295

10 P.D. 188 7

42 U.C.R. 39 650

25 S.C.R. 96 287

15 A.R. 234 653

5Q.B. 415 475

[1892] 1 Q.B. 147 616, 621

[1910] A.C. 242 57, 70

16 O.L.R. 328 207

27 O.R. 450 459, 471, 481

9 Ves. 234 626

56 L.T.R. 124 337

1 O.L.R. 503 206

10 Peters (S.C.) 507, at p. 517. . . 69

[1904] 1 K.B. 794 494

16Beav. 435 298

75 Minn. 429 556

9 O.W.R. 369 334

13 M. & W. 379, 387 500

12 C.B.N.S. 456 466

13C.B. 826 151

17 Can. Crim. Cas. 179 488

12 O.W.R. 552 510, 511

20 O.L.R. 520 254, 259

1 Coll. 320 295

[1894] 2 Q.B. 316 509

15 Beav. 421 298

[1908] 1 Ch. 604 649

14 A.R. 503 569

[1908] 1 Ch. 379 .... 120

31 N.E. Repr. 391 10, 13

4 O.L.R. 496 374

16 O.R. 207 407

L.R. 2 Ch. 478, 481 473

13 Beav. 271 649

1 DeG. M. & G. 537 546

25 O.R. 607, 26 O.R. 1.

.390, 399

Dalton v. Angus 6 App. Cas. 740 470, 481

Darley v. The Queen . 12 Cl. & F. 520 271

David Lloyd & Co., In re. 6 Ch.D. 339 644

Davis, Re 18 O.L.R. 384

. . .113, 115, 367, 371, 373, 602, 607

Davis v. McCaffrey 21 Gr. 554 371, 372

Dawson v. Isle [1906] 1 Ch. 633, 637 185

Deacon v. Chadwick 1 O.L.R. 346 3

xxvi].

CASES CITED.

XIX

Name of Case.
Debenham v. Mellon

Where Reported. Page.

5 Q.B.D. 394, 6 App. Cas. 24. . . .

Deere v. Beauvais

Dennistoun v. Fyfe

Devine v. Griffin

Dewar v. Tasker & Sons Limited

Dickey v. McCaul

Dinsmore v. Shackleton

Doan v. Davis

Doan v. Michigan Central R.W. Co. .

Dobson v. Dobson.

Dodge v. Smith

Donnellan v. O’Neill

Donovan v. Laing Wharton and Down
Construction Syndicate Limited..

Driffil v. McFall

Dryden v. Smith

Duckworth, In re.

Dudgeon v. Pembroke

Dumphy v. Kehoe

Durant v. Canadian Pacific R.W. Co.
Durant & Co. v. Roberts and Keighley

Maxsted & Co

Dutton, In re

Dyke v. Stephens

Eby-Blain Co. v. Montreal Packing

Edward Nelson & Co. v. Faber & Co.
Elgin Loan and Savings Co. v. London

572, 573

7 Q.P.R. 448

374

11 Gr. 372

450

4 Gr. 603

626

23 Times L.R. 259. .. .

411

14 A.R. 166

649

26 C.P. 604

509

23 Gr. 207

405, 406

17 A.R. 481

125

7 P.R. 256

. .434, 435

1 O.W.R. 803, 2 O.W.R. 561 509

Ir. R. 5 Eq. 523, 532..

[1893] 1 Q.B. 629

410, 426

41 U.C.R. 313

148

17 P.R. 500

. .430, 435, 436

L.R. 2 Ch. 578

570

2 App. Cas. 284

21 Rev. Leg. 119

576, 579

13 O.W.R. 316

124

[1900] 1 Q.B. 629

625

4 Ex. D. 54

Ill

30 Ch.D. 189

375

2 Coll. 342

3 Q.B.D. 432

7, 8

17 O.L.R. 292

288

[1903] 2 K.B. 367

650

11 O.L.R. 330

:: . 82

Ellis and Town of Renfrew, Re 21 O.L.R. 74, 23 O.L.R. 427. . . .

340, 348, >352

Ellis v. Barker L.R. 7 Ch. 104 309

Embury v. West 15 A. R. 357. . . : 653

Emmet v. Dewhurst 3 Macn. & G. 587 583

Enoch and Zaretzky Bock & Co.’s

Arbitration, In re [1910] 1 K.B. 327. 509, 521

Essery v. Grand Trunk R.W. Co 21 O.R. 224 148, 151

Etherington and Lancashire and York-
shire Accident Insurance Co., In

re [1909] 1 K.B. 591. . . .57, 58, 70, 75, 80

Evelyn v. Lewis 3 Ha. 472 649

Ewart v. Cochrane 4 Macq. H.L. 117 479

Farquharson v. Barnard Argue Roth

Fenton v. Thorley & Co. Limited

Ferguson v.

Filby v. Hounsell.

25 O.L.R. 93

650

[1894] 1 Q.B. 552

391

12 O.L.R. 245

602, 612

9 P.R. 329

391

[1903] A.C. 443

8 P.R. 556

602

26 U.C.R. 26

9 B. & C. 59

625

26 O.L.R. 367

602, 605

[1896] A.C. 600, 611

598

[1896] 2 Ch. 737

629

CASES CITED.

Name of Case.

Where Reported.

[VOL.

Page.
. . 207

Fisher v. Fisher 1 O.W.R. 442.

Fitzroy, Township of, v. County of

Carleton 9 O.L.R. 686 199, 200

Fleming, Re 11 P.R. 272, 285 177

Fleming, Re 7 O.L.R. 651 295, 301

Foley v. Fletcher 3 H. & N. 769. .

Forster v. Forster and Berridge, Re. . 4 B. & S. 187. . .

Fowler v. Fowler 33 Beav. 616. . .

Foxwell v. Kennedy 24 O.L.R. 189. .

Fuller v. Hooper 2 Ves. Sr. 242 —

Fulton v. Andrew L.R. 7 H.L. 348.

Fynn, In re 2 DeG. & S. 457.

. . . . 120
. . . . 401

. ... no

. . . . 107
. . . . 90

206, 215
. ... 609

Gardner v. Hodgson’s Kingston Brew-
ery Co

Garner v. Township of Stamford

Gassiot, In re

Gemmill v. Nelligan

General Mutual Insurance Co. v.

Sherwood *. .

General Steam Navigation Co. v.
British and Colonial Steam Navi-
gation Co

Gibbons v. Ogden

Gibson v. Bott

Gilbey v. Great Western R.W. Co. . . .

Gilchrist. In re

Giles v. Perkins

Gillie v. Young

Gissing v. T. Eaton Co

Glossop v. Heston and Isleworth

Local Board

Glyn, Ex p

Glynn v. Margetson & Co

Going v. Hanlon

Goldsmid v. Tunbridge Wells Im-
provement Commissioners

Goldstein v. Canadian Pacific R.W.

Goodman v. Saltash Corporation

Goodwin v. Waghorne

Gordon v. Gordon

Gordon v. Spencer

Goss v. Lord Nugent

Goubot v. De Crouy

Government Stock and Other Securi-
ties Investment Co. v. Manila

R.W. Co

Gowland v. Garbutt

Grand Trunk R.W. Co. v. Attorney-

General of Canada

Grand Trunk R.W. Co. v. Griffith. . . .
Grand Trunk R.W. Co. v. Huard. ....

Grass v. Allan, In re

Graves, Ex p

Gray v. Garman

Gray v. Smith

Great Central R.W. Co. v. Lancashire

and Yorkshire R.W. Co

Green, Ex p

[1903] A.C. 229 469

7 O.L.R. 50 77

70 L.J.N.S. Ch. 242 110

26 0.R. 307 404

14 How. S.C. 351, at p. 366 69

L.R. 3 Ex. 330, L.R. 4 Ex. 238. . . 410

9 Wheat. 1, 204 599

7 Yes. 89, 96 120

102 L.T.R. 202 75, 78

[1907] 1 Ch. 1 546

9 East 12 185

1 O.L.R. 368 367, 374

25 O.L.R. 50 309

12 Ch.D. 102, at p. 122 52

1 Mont. D. & DeG. 25 451

[1893] A.C. 351, at p. 355 272

4 Ir. R.C.L. 144 177

L.R. 1 Eq. 161, L.R. 1 Ch. 349. .
460, 474

23 O.L.R. 536 437, 439

7 App. Cas. 633, 648 475

4 L.J.N.S. Ch. 172 451

3 Swanst. 400 309

2 Blackf. (Ind.) 286, 288 159

5 B. & Ad. 58 583

1 C. & M. 772 325

[1897] A.C. 81 288

13 Gr. 578 147

[1907] A.C. 65, 68 598

45 S.C.R. 380 79

36 S.C.R. 655 410

26 U.C.R. 123 390

19 Ch.D. 1 578

2 Hare 268 297

43 Ch.D. 208 630

13 Ry. & Canal Traffic Cas. 266. 593
35 N.B.R. 137 596

XXVI.

CASES CITED.

XXI

Name of Case.

Where Reported. Page.

Green v. Bartlett 14 C.B.N.S. 681, 685 45

Green v. Stevenson 9 O.L.R. 671 625, 626

Grills v. Farah 21 O.L.R. 457 323, 324, 326, 329

Gyde, Re 79 L.T.R. 261 176

Gyfford v. Woodgate 11 East 297 325

Habergham v. Ridehalgh

Hague, Re

Haig v. Swiney

Haigh, Ex p

Haldimand Dominion Election Case. .

Hall v. Berry

Hall v. Lees

Hall v. Lund

Hall v. Severne

Hall v. Smith

Halley, The

Hammans v. Great Western R.W. Co.

Hannam, In re

Hansford v. Grand Trunk R.W. Co. . .

Harrison, Re

Harrison v. Guest

Harrison v. Mobbs

Hart v. Hart

Hartopp v. Hartopp

Hay and Town of Listowel, Re

Hay v. Employers’ Liability Assur-
ance Corporation

Haynes v. Leland

Hedges v. Harpur

Heller v. Howard

Hendrick v. Employers’ Liability

Assurance Corporation

Heney v. Low

Hensey v. White

Henwood v. Overend

Hoare v. Osborne

Hodge v. The Queen

Hoeffler v. Irwin

Hoghton v. Hoghton

Holland, In re

Holmes v. Kidd

Holroyd v. Marshall

Hooper v. Accidental Death Insurance

Hooper v. Lane

Hope v. Hope

Hopkins, Re, Barnes v. Hopkins

Horsfall v. Boisseau

Hotchkiss’s Trusts, In re

Houlihan v. Preferred Accident In-
surance Co. of New York

Hoyle, In re

Huguenin v. Baseley

Humphrys v. Polak

Hussey v. Horne-Payne

Hutchinson, Re !

Hyman v. Van den Bergh

L.R. 9 Eq. 395 300

14 O.R. 660 404

I Sim. & Stu. 487 177

II Ves. 403 450

1 Ont. Elec. Cas. 529 340

10 O.W.R. 954 623

[1904] 2 K.B. 602 411

1 H. & C. 676 479

9 Sim. 515 87, 89, 90

2 Bing. 156 425

L.R. 2 P.C. 193 412

4 Rv. & Canal Traffic Cas. 181 . . 593
[1897] 2 Ch. 39 295, 299

13 O.W.R. 1184 410, 411, 425

31 O.R. 314 207, 375

2 Jur. N.S. 911 307, 309

12 O.W.R. 465 625

18 Ch.D. 670 7

21 Beav. 259 309

28 O.R. 332 556

6 O.W.R. 459 82

29 Me. 233, 234, 243 159

3 DeG. & J. 129 120

11 111. App. 554 159

62 Fed. Repr. 893 10

9 Gr. 265 403

[1900] 1 Q.B. 481, at p. 485 73

1 Mer. 23 87, 89

L.R. 1 Eq. 585 110

9 App. Cas. 117 598

8 O.L.R. 740 625

15 Beav. 278 309

[1902] 2 Ch. 360 626, 630

3 H. & N. 891 184

10 H.L.C. 191, 9 Jur. N.S. 213, 2

DeG. F. & J. 596 564, 567

5H. &N. 546 11

6 H.L.C. 443 622

8 DeG. M. & G. 731 607

8 P.R. 160 404

21 A.R. 663 569

L.R. 8 Eq. 643 295, 298

145 N.Y. St. Repr. 1048 57, 64

[1893] 1 Ch. 84 626, 630

14 Ves. 273 309

[1901] 2 K.B. 385 602, 607

4 App. Cas. 311 625, 630

26 O.L.R. 113 367, 371

[1908] 1 Ch. 167 466

Ilchester, Earl of, Ex p 7 Ves. 348

372, 373

XXII

CASES CITED.

[VOL.

Name of Case. Where' Reported. Page.

Ilfracombe R.W. Co. v. Devon and

Somerset R.W. Co L.R. 2 C.P. 15 326

Illingworth v. Houldsworth [1904] A.C. 355 650

Ive v. King 16 Beav. 46 297

Jansen, In re 12 O.L.R. 63 207

Jarrett v. Hunter 34 Ch.D. 182 629

Jenkins v. Wilcock 11 C.P. 505 323, 326, 330

John Griffiths Cycle Corporation Lim-
ited v. Humber & Co. Limited. . . [1899] 2 Q.B. 414 629

Johnston v. Wade 17 O.L.R. 372 279, 284, 286, 287

Jolly v. Rees 15 C.B.N.S. 628 572, 573

Jones v. Bank of Upper Canada 12 Gr. 429, 13 Gr. 74 450

Jones v. Chapman 5 Blackf. (Ind.) 88 159

Jones v. Sculiard [1898] 2 Q.B. 565 412

Jordan v. Provincial Provident Insti-
tution 28 S.C.R. 554 75, 82

Joshua Stubbs Limited, In re [1891] 1 Ch. 187 644

Jurisdiction of a Province to Legislate
Respecting Abstention from La-
bour on Sunday, In re 35 S.C.R. 581 591

Keighley Maxsted & Co. v. Durant &

Kelly v. Kelly

Kennedy v. Kennedy

Kennedy v. Oldham

Kensington, Ex p

Kessowji Issur v. Great Indian Pen-
insula R.W. Co

Keys, Re

Kilroy v. Simkins

King v. Waring

Kinghorn and City of Kingston, Re. . .
Kingston, City of, v. Kingston, etc.,

R.W. Co

Kinnaird v. Trollope

Kitching v. Hicks

Knill v. Towse

Knox v. Gye

Kreh v. Moses

Kruse v. Johnson

Kurtz and Co. v. Spence and Sons. . . .

Lacon v. Allen

Lafrance v. Lafrance

Lambert, In re

Lands Allotment Co., In re

Lanphier v. Buck

Lawrence v. Accidental Insurance Co.

Lawson v. McGeoch

Lecone v. Sheires

Leconfield v. Lonsdale

Lee v. Arthur

Lewis, Re

Leyton Urban District Council v.

Chew

[1901] A.C. 240

624, 626

20 Man. L.R. 579

249

24 O.L.R. 183

107

13 O.W.R. 984

107

15 O.R. 433

630

2 Yes. & B. 79

450

96 L.T.R. 859

.510, 517, 521

12 O.W.R. 160

602

26 C.P. 281

184

5 Esp. 13

.155, 156, 159

26 U.C.R. 130

556

.23 O.R. 399, 25 A.R. 462

39 Ch.D. 636

152

6 O.R. 739

288, 569

24 Q.B.D. 186, 198

341

L.R. 5 H.L. 656

253

22 O.R. 307

207

[1898] 2 Q.B. 91

558, 560

58 L.T.R. 438

.309, 310, 315

!•

3 Drew. 579

450, 451

18 P.R. 62

' 7

[1908] 2 Ch. 117

300

[1894] 1 Ch. 616, at p. 632 253

34 L.J. Ch. 650, 656

299

7 Q.B.D. 216

57, 58, 67, 73

20 A.R. 464

653

1 Vern. 442

372

L.R. 5 C.P. 657, 726. . .

471

100 L.T.R. 61, 62

.332, 335, 338

11 P.R. 107

. . .83, 84, 86

[1907] 2 K.B. 283

561

xxvi].

CASES CITED.

XXIII

Name of Case. Where Reported. Page.

L’Herminier, In re

Lime Rock Bank v. Mallett

Lincoln Election Petition, Re

Lindsay v. Lindsay

Lints v. Lints

Liverpool and London and Globe In-
surance Co. v. Agricultural Sav-
ings and Loan Co

Lloyd v. Davis

Lloyd v. Matthews

Locators v. Clough

London and North-Western R.W. Co.

v. Evans

London Pressed Hinge Co., In re

Long, In re, Exp. Cuddeford

Long v. Millar

Longaker, Re

Longendale Cotton Spinning Co., In

Lord’s Day Act of Ontario, Re

Loring v. Thomas

Low v. Guthrie

Luckhardt, Re

Lundy v. Lundy

Lyons v. Blenkin

[1894] 1 Ch. 675 177

42 Me. 349, 358 185

4 A.R. 206 340, 355, 356

23 Gr. 210 406, 407

6 O.L.R. 100 207

33 S.C.R. 94 80

3 L.J.O.S.K.B. 38 185

51N.Y. 124 46

17 Man. L.R. 659 43, 45, 47

[1892] 2 Ch. 432 471

[1905] 1 Ch. 576 286

20Q.B.D. 316 331

4C.P.D. 450 625

12 O.W.R. 1193 602

8 Ch.D. 150 644

1 O.W.R. 312 590

1 Dr. & Sm. 497, 510. . . .295, 296, 300

[1909] A.C. 278 205, 206

29 O.R. Ill 408

24 S.C.R. 650 616, 621

Jac. 245 116

McCaffrey v. McCaffrey

McCartan v. Belfast Harbour Com-
missioners

McCrae v. Molsons Bank

McCumber and Doyle, In re

McDonald v. Murray

McEwan v. Milne

McGrath and Town of Durham, In re.

McGregor v. McGregor. .

McGuin v. Fretts

McIntyre Brothers v. McGavin

McKeand v. Canadian Pacific R.W.

Mackenzie v. Maple Mountain Mining

Mackenzie v. Sligo and Shannon R.W.

McKinnon v. Lundy

McLeod v. Emigh (2), Re

McRoberts v. Steinoff

Maddison v. Alderson

Malcolm v. Ferguson

Man v. Ricketts

Mannox v. Greener

Mansell v. Clements

Manufacturers’ Accident Indemnity

Co. v. Dorgan

Mardorf v. Accident Insurance Co. . . .

Marine Mansions Co., In re

Marsh v. Astoria Lodge

Marsh v. Joseph

Martin v. Mackonochie

Martin v. Martin & Co

Martindale v. Clarkson

Mason v. MacDonald

18 A.R. 599 206, 225, 309

44 Irish Law Times 223 412, 425

25 Gr. 519 653

26 U.C.R. 516 391, 396

2 O.R. 573, 11 A.R. 101. ... . .629, 630

5 O.R. 100 207

17 O.L.R. 514 340, 348

21 Q.B.D. 424 7

13 O.R. 699 649

[1893] A.C. 268 461

Not reported 79

20 O.L.R. 615 378

4 E. & B. 120 326

24 O.R. 132, 21 A.R. 560 616, 621

12 P.R. 503 399

11 O.R. 369 653

8 App. Cas. 467, 488 582, 625

14 O.W.R. 737, 1 O.W.N. 77 206

7 Beav. 93, 101 85

L.R. 14 Eq. 456, 462 177

L.R. 9 C. P.139 45

58 Fed. Repr. 945 57, 58, 66, 67

[1903] 1 K.B. 584 57, 68

L.R. 4 Eq. 601, 610 649

27 111. 421 493

[1897] 1 Ch. 213 624

3 Q.B.D. 730, 4 Q.B.D. 697. .391, 401

[1897] 1 Q.B. 429 336

6 A.R. 1, 6 408

25C.P. 435 569

XXIV

CASES CITED.

[VOL.

Name of Case.

Masuret v. Mitchell

Matthew Guy Carriage and Auto-
mobile Co., Re, Thomas’s Case. .
Maudslay Sons & Field, In re, Mauds] ay
v. Maudslay Sons & Field

Mendels v. Gibson

Metcalfe, In re

Metcalfe v. Hutchinson

Midland R.W. Co. v. Guardians of

Edmonton Union

Miles, Re

Miles v. New Zealand Alford Estate

Mill v. Commissioner of New Forest..

Milroy v. Lord

Mingeaud v. Packer

Molsons Bank v. Beaudry

Mones v. McCallum

Monypenny v. Dering

Moore v. Campbell

Moore v. Kirkland

Morel Brothers & Co. Limited v. Earl

of Westmoreland

Morgan v. Chetwynd

Morgan v. Johnson

Morlock and Cline Limited, Re, Sarvis

and Canning’s Claims

Morrow v. Jenkins

Mountfort, Exp

Mountfort, Ex p

Munsen v. Hauss

Murray. Re

Murray v. Canada Central R.W. Co. .

Where Reported. Page.

26 Gr. 435 450

3 O.W.N. 902 262

[1900] 1 Ch. 602 4

9 0.L.R. 94 147

[1909] 1 Ch. 424 296

1 Ch.D. 591, at p. 594 177

[1895] 1 Q.B. 357 391, 395

14 0.L.R. 241 90

32 Ch.D. 266 308, 310

18 C.B. 60 471

4 DeG. F. & J. 264 207

21 O.R. 267, 19 A.R. 290 207, 375

Q.R. 11 K.B. 212 291, 292

17 P.R. 398 649

2 D.M. & G. 145 175

10 Ex. 323, 332 582

5 C.P. 452 323, 326, 330

[1903] 1 K.B. 64, [1904] A.C. 11. . 572
4 F. & F. 451, 457 574

3 O.W.N. 297 629

23 O.L.R. 165 377, 381

6 O.R. 693 177

14Ves. 606 450

15Ves. 445 372

22 Gr. 279 147

4 0.W.R. 281 207

7 A.R. 646, 655 509

Nalder v. Hawkins 2 My. & K. 243 375

National Debenture and Assets Cor-
poration, In re [1891] 2 Ch. 505, 516 510

National Telephone Co. v. Constables

of St. Peter Port [1900] A.C. 317, 321 649

Neath Harbour Smelting and Rolling

Works, In re 2 Times L.R. 94 510

Neaverson v. Peterborough Rural Dis-
trict Council [1901] 1 Ch. 22, [1902] 1 Ch.

557 471,475,483

Neilson v. Trusts Corporation of

Ontario 24 O.R. 517 : 207

New Hamburg Manufacturing Co. v.

Webb 23 O.L.R. 44 477

Newburgh Associate Reformed Church
Trustees v. Princeton Theological

Seminary Trustees 4 N.J. Eq. 77 103

Newell v. Radford L.R. 3 C.P. 52 630

Nicholl v. Elliott 3 Gr. 536 434

Nixon v. Brownlow 1 H. & N. 405 325

Nobel’s Explosives Co. v. Jones 17 Ch.D. 721, at p. 739. .204, 206, 212

Noble v. Ward L.R. 2 Ex. 135 582

North British R.W. Co. v. Wood 18 Ct. of Sess. Cas. (4th Series)

27 306

Northrup v. Railway Passenger Assur-
ance Co 43 N.Y. 516 11, 64

Norton v. Smith 20 U.C.R. 213 404

XXVI.]

CASES CITED.

XXV

Name of Case. Where Reported. Page.

Nott v. Stoddard 38 Vt. 25, 31 159

Nottawasaga, In re Township of, and

County of Simcoe 4 O.L.R. 1 391

' 0.

Ockford v. Freston 6 H. & N. 466 622

O’Donnell v. Nee 86 Fed. Repr. 96 159

0’ Farrell v. Limerick and Waterford

R.W. Co 13 Ir. L.R. 365 400

O’Hara, In re [1900] 2 I.R. 232 607, 610

Oliver v. Hunting 44 Ch.D. 205 630

Ooregum Gold Mining Co. of India v.

Roper [1892] A.C. 125 254, 260, 261, 262

Orangeville Local Option By-law,

Re 20 O.L.R. 476 339, 340, 342, 346,

cmq

Ouimet v. Bazin 48 C.L.J. 439 601

Oulds v. Harrison 10 Ex. 572 184

Overend Gurney & Co., In re, Ex p.

Swan L.R. 6 Eq. 344. . 184

Overton v. Banister . 3 Hare 503 455

Page v. Leapingwell

Palmer, In re

Palmer v. Hendrie

Palmer v. Justice Assurance Society . .

Parke v. Riley

Parker v. Mitchell

Parker v. Odette

Parkes v. St. George

Patapsco Insurance Co. v. Coulter. . .

Pavey v. Davidson

Paxton v. Jones

Pearce v. Gardner

Peck and Township of Ameliasburg,

Peel v. Catlow

People v. Doris

People v. Muller

Perry v. Barker

Perth Flax and Cordage Co., Re

Phillips v. Mullings

Phillips v. Nairne

Pine Hill Lutheran Congregation Trus-
tees v. St. Michael’s Evangelical

Church of Pine Hill

Pirie v. Wyld

Platt v. Forty-Second St. and Grand

St. Ferry R.R. Co

Polak v. Everett

Portuguese Consolidated Copper
Mines Limited, Re, Exp. Badman,

Ex p. Bosanquet

Potter v. Duffield

Potter’s Trust, In re

Power v. Griffin

Powis v. Ontario Accident Insurance

Pratt v. Bunnell

18Ves. 463 177

[1893] 3 Ch. 369 301

27 Beav. 349, 28 Beav. 341

145, 147, 153

6 E. & B. 1015 326

3 E. & A. 215 404

11 A. & E. 788 466

16 P.R. 69 4

2 0.R. 342 569

3 Peters (S.C.) 222, at p. 233 ... . 69

23A.R. 9 3

APT? 1Q£ 404

[1897] 'l Q.B. 688. V. ... V. ... .626, 630

17 0.R. 54 556

9 Sim. 372 298

14 App. Div. N.Y. 117 137

96N.Y. 408 137

13Ves. 198 147

13 0.W.R. 1140 279, 288

L.R. 7 Ch. 244 206, 225

4 C.B. 343, at pp. 350, 351 69

48 Pa. St. 20 103

11 O.R. 422 303, 309, 315, 323

2 Hun (N.Y.) 124 10, 13

1 Q.B. D. 669 185

45 Ch.D. 16 625

L.R. 18 Eq. 4 624, 629

L.R. 8 Eq. 52 295, 298

33 S.C.R. 39 398

1 O.L.R. 54.
21 O.R. 1. . .

404

XXVI

CASES CITED.

[VOL.

Pridie v. Field 19 Beav. 497 120

Prince v. Oriental Bank Corporation.. 3 App. Cas. 325 3

Purdom v. Pavey & Co 26 S.C.R. 412 3

Queen City Plate Glass Co., Re, East-

mure’s Case 1 O.W.N. 863 377, 380

Queen’s College v. Jayne , 10 O.L.R. 319 625

Quilter v. Mapleson 9 Q.B.D. 672 511, 547

Railroad v. Delaney

Rainy Lake Lumber Co., In re

Rangeley v. Midland R.W. Co

Raven Lake Portland Cement Co., Re,
National Trust Co. v. Trusts and

Guarantee Co

Regina v. Bailey

Regina v. Barnardo

Regina v. Boyd

Regina v. Cameron

Regina v. France

Regina v. Gyngall

Regina v. Halifax Electric Tramway

Regina v. Hicklin

Regina v. James

Regina v. Jones

Regina v. Justices of Kent

Regina v. Lambour Valley R.W. Co. .

Regina v. Laurence

Regina v. Lushington, Exp. Otto

Regina v. McIntosh

Regina v. McNamara

Regina v. Mayor of London

Regina v. Murray

Regina v. Neville

102 Term. 289, 294,

15 A.R. 749

L.R. 3 Ch. 306, 310

295.

159

649

471

Regina v. Norton. . .
Regina v. Parker . . .
Regina v. Patterson .
Regina v. St. Clair. .
Regina v. Smith

Regina v. Stafford

Regina v. Weir (No. 3)

Regina v. Weir (No. 5)

Regina v. Wright

Regina ex rel. Clancy v. Conway.
Regina ex rel. Clanc}^ v. St. Jean.

Regina ex rel. Grayson v. Bell . .
Regina ex rel. Halsted v. Ferris.
Regina ex rel. Moore v. Nagle . .

Rex v. Bates

Rex v. Beaver

Rex v. Beeston

Rex v. Benson

Rex v. Corrigan

Rex v. James

Rex v. Key

24 O.L.R. 286 280

6CoxC.C. 29.. 500

23 Q.B.D. 305 372, 602

Q.R. 5 Q.B. 1, 4 Can. Crim. Cas.

219 497, 500, 501, 504, 505, 507

2 Can. Crim. Cas. 173 507

1 Can. Crim. Cas. 321 488

[1893] 2 Q.B. 232. . . .602, 607, 609, 611

30N.S.R. 469 596

L.R. 3 Q.B. 360 137

12 Cox C.C. 127 499

[1898] 1 Q.B. 119 506

24 Q.B.D. 181 '399

22 Q.B.D. 463 51

1 Can. Crim. Cas. 295 18

[1894] 1 Q.B. 420 488

28 O.R. 603 389, 391, 397

20O.R. 489 18

69L.T.R. 721 399

27 U.C.R. 134. 391, 396

Crawford & Dix’s Notes of Cases

96, 97 511

16 Cox C.C. 59 499

9C. &P. 45 64

26 O.R. 656 502

27 A.R. 308 18

17 Jur. 24, 22 L.J.N.S.Q.B. 116,

16 Eng. L. & Eq. 221 606

1 Can. Crim. Cas. 239 24

3 Can. Crim. Cas. 262. . .500, 502, 507

3 Can. Crim. Cas. 499, 503 507

2 F. & F. 320 500

46 U.C.R. 85 263, 269, 272, 274

46 U.C.R. 77, at pp. 81, 82

269, 272, 274

1 U.C.L.J.N.S. 130 270, 272

6 U.C.L.J.N.S. 266 270, 272

24 O.R. 507 271

[1911] 1 K.B. 964 504

9 O.L.R. 418 137, 141

q T r? KQO ko

[1908] 2 K.B. 270. 7. . '. .’.500, 504, 505

20 O.L.R. 99 504

[1902] 1 K.B. 540 482

1 Cr. App. R. 135 137

xxvi].

CASES CITED.

XXYII

Name of Case.

Rex v. Komiensky

Rex v. Larwood

Rex y. Lee Guey

Rex y. Lovitt

Rex v. Mayor, etc., of Winchester. . . .

Rex v. O’ Gorman

Rex v. Swyer

Rex v. Thompson

Rex v. Ward

Rex v. Wener

Rex v. Wheatly

Rex v. White

Rex ex rel. Ivison v. Irwin

Reynolds v. Accidental Insurance Co.
Ricardo v. Maidenhead Local Board

of Health

Rice v. Galbraith

Richard Evans & Co. Ltd. v. Astley. .

Richards v. Fry

Richards v. Jenkins

Richardson, In re

Richardson v. Alpena

Richardson v. Great Eastern R. W. Co.

Rickard v. Robson

Ridgeway v. Darwin

Ridgway v. Wharton

Riel v. The Queen

Roberts, In re

Roberts v. Hall

Robertson, Re

Robertson v. French

Robertson v. Robertson

Robinson v. Canadian Pacific R.W.

Robinson v. Grave

Robinson v. Hardcastle

Robinson v. Page

Rochdale Canal Co. v. Radcliffe

Rodhouse v. Mold

Rogers v. Clifton

Rogers v. Ingham

Rolland V. La Caisse d’Economie

Notre Dame de Quebec

Rosenbaum v. Belson

Rosher, In re

Ross v. Grand Trunk R.W. Co

Ross v. Township of London

Rossiter v. Miller

Rourke v. Robinson

Routledge v. Dorril

Rowland v. McCallum, Re

Royal Canadian Bank v. Cummer. . . .

Royal -Canadian Bank v. Ross

Rudge v. Richens

Rush and Village of Bobcaygeon, In

Russel v. Russel

Where Reported.

Page.

6 Can. Crim. Cas. 524 17, 18, 22

Carthew 306 275

15 O.L.R. 235 488, 489

[1912] A.C. 212 1, 3, 5

7 A. &E. 215 269

18 O.L.R. 427 18

10 B. & C. 486 268

17 Man. L.R. 608 17, 22, 27

4 A. & E. 384 472

6 Can. Crim. Cas. 406. .17, 18, 21, 22

2 Burr. 1125 499

18 O.L.R. 640 489

4 O.L.R. 192 340

22 L.T.N.S. 820 57, 70

2 H. & N. 257 401

26 O.L.R. 43 587

[1911] A.C. 674, 678 79

7 A. & E. 698 466

17 Q.B.D. 544, 18 Q.B.D. 451. .. . 290

L.R. 12 Eq. 398 148, 151

40 Mich. 203 648

1C.P.D. 342 125

31 Beav. 244 105, 108, 110

8 Yes. 65 511

6H.L.C. 238 626

10 App. Cas. 675 595

3Atk. 308, 312 510

[1905] 1 Ch. 704 309

1 O.R. 388 116, 602, 606, 607

24 Gr. 442 406

4 East 130, at pp. 135, 136 71

25 Gr. 486 404, 405, 406, 407, 408

23 O.L.R. 536 437, 439

27 L.T.N.S. 648 477

2 Bro. C.C. 22 175

3 Russ. 114, 121. 584

18 Q.B. 287 471, 475, 483

35 L.J.Ch. 67 176

3 B. & P. 587 157

3 Ch.D. 351, atp. 355 120

24 S.C.R. 405 645, 649

[1900] 2 Ch. 267 629

26 Ch.D. 801 175

10 O.R. 447 151

20 O.L.R. 578, 23 O.L.R. 74. .48, 49, 50

3 App. Cas. 1124 630

[1911] 1 Ch. 480 147

2Ves. Jr. 356 175

22 O.L.R. 418 \ . 390

15 Gr. 627 450

40U.C.R. 466 653

L.R. 8 C.P. 358 152

44 U.C.R. 199 391, 396

1 Bro. C.C. 269 449, 450

St. John (Lord) v. Lady St. John .... 11 Ves. 526, 531 607

Sager v. Sheffer 2 O.W.N. 671 43, 45, 47

Salford, Mayor, etc., of, v. County

Council of Lancashire 25 Q.B.D. 384 53

XXVIII

CASES CITED.

[VOL.

Name of Case. Where Reported. Page.

Salisbury, Marquis of, v. Ray 8 C.B.N.S. 193 ; 331

Saltash, Corporation of, v. Jackman.. 1 D. & L. 851 338

Saltfleet, In re Local Option By-law

of the Township of 16 O.L.R. 293 339, 340, 342, 346

348, 352, 359

Sandys, Exp 42 Ch.D. 98, 117 257

Savill Brothers Limited v. Bethell. . . [1902] 2 Ch. 523, 537 648

Scott v. Canadian Pacific R.W. Co. . . 19 Man. L.R. 165 125

Sealy, Re 85 L.T.R. 451 90

Sellars v. Village of Dutton 7 O.L.R. 646 .48, 50

Shaftsbury v. Hannam Finch’s Reports 323 372

Shelford v. Louth and East Coast R.

W. Co 4 Ex. D. 317 511

Sheppard v. Sheppard 14 Gr. 174 406

Sherer v. Bishop 4 Bro. C.C. 55 89

Shinglemeyer v. Wright 124 Mich. 230, 240 159

Shoe Machinery Co. v. Cutlan [1896] 1 Ch. 108, 114 510

Siddons v. Short 2 C.P.D. 572 478, 480

Simmons v. “Liberal Opinion” (Lim-
ited), Re Dunn 27 Times L.R. 278 494

Simmons v. Mailing Rural District

Council [1897] 2 Q.B. 433 561

Simmons v. Montague [1909] 1 I.R. 87 451

Sinclair and Town of Owen Sound, Re. 13 O.L R. 447 340

Singer v. Russell 25 O.L.R. 444 44

Skelton v. Cole 1 DeG. & J. 587 624

Skinner & Co. v. Shew & Co. [1893] 1 Ch. 413 511

Slattery v. Naylor 13 App. Cas. 446 561

Slingsby, The 120 Fed. Repr. 748 417

Smith v. Chorley District Council [1897] 1 Q.B. 532 52

Smith v. Mason 17 P.R. 444 376

Smith v. Norton 7 U.C.L.J.O.S. 263 403

Smith v. Smith 8 Sim. 353 295

Smith v. Wood 3 Camp. 323, 14 P.R. 752. . .155, 156,

157, 159

Smyth, Ex p 3 A. & E. 719 401

’'South Eastern R.W. Co. v. Associated
Portland Cement Manufacturers

(1900) Limited [1910] 1 Ch. 12 648

South Essex Estuary and Reclamation

Co., In re L.R. 4 Ch. 215 565, 570

South Grenville Election, Jones’s

Case H.E.C. 163, 176 278

Standard Realty Co. v. Nicholson.. . . 24 O.L.R. 46 626

Standard Trading Co. v. Seybold 1 O.W.R. 650 430, 431, 435

Stapilton v. Stapilton 1 Atk. 2 309

Starr v. Mayor, etc., of Exeter 3 Lev. 116 275

State v. McKee 73 Conn. 18 137

Steere v. Smith 2 Times L.R. 131 45

Stewart v. Pere Marquette R.W. Co.. 6 O.W.R. 724 410

Stiles v. Galinski [1904] 1 K.B. 615 560

Story, Exp 12 C.B. 767, 777 391

Stowell v. Robinson 3 Bing. N.C. 928 583

Stratheden, Lord, and Campbell, In

re [1894] 3 Ch. 265 175, 181

Stratton v. Vachon 44 S.C.R. 395 44, 45, 47, 585, 587

Stroud v. Lawson [1898] 2 Q.B. 44 649

Strong v. Lewis 1 Gr. 443, 445 404

Studds v. Watson 28 Ch.D. 305 626

Sturtevant v. Ford 4 M. & G. 101 196

Sussex, The [1904] P. 236 411

Suter v. Merchants Bank 24 Gr. 365. 653, 654

Sutherland v. Grand Trunk R.W. Co. 18 O.L.R. 139 437, 439

XXVI.]

CASES CITED.

XXIX

Name of Case. Where Reported. Page.

Sutton v. Smith 13 Mo. 120, 123, 124 159

Swain, In re [1905] 1 Ch. 669 173, 176

Swainson v. North Eastern R.W. Co. . 3 Ex. D. 341 411, 417

Swan v. North British Australasian

Co 32 L.J. Ex. 273 649

Tailby v. Official Receiver

Templer, Ex p

Tennant v. Union Bank

Tennent v. Tennents

Tewkesbury Gas Co., In re

Theobald v. Railway Passengers As-
surance Corporation

Thibaudeau v. Paul

Thirkell, Re, Perrin v. Wood

Thomas v. Brown

Thomas v. Sutters

Thompson v. Giles

Thomson v. Shakespear

Thorndyke v. Thorndyke

Thornhill v. Thornhill

Thorpe v. Richards

Thuman v. Best

Thuresson, In re

Thynne v. Earl of Glengall

Tone, Conservators of the River, v.
Ash

13 App. Cas. 523 238

Saund. &C. 169 113, 116

19 A.R. 1 653

L.R. 2 Sc. & D. 6 309

[1911] 2 Ch. 279, [1912] 1 Ch. 1.. . 648

10 Ex. 45 11

26 O.R. 385

.279, 288

21 Gr. 492

.... 569

1 Q.B.D. 714

.... 625

[1907] 1 Ch. 10. 15....

.... 600

2 B. & C. 422

.... 185

1 DeG. F. & J. 399...

...105,

108, 109

1 O.W.R. 11

.... 207

4 Madd. 377

. . .295,

298, 299

15 Gr. 403

.... 406

97 L.T.R. 239

.... 629

3 O.L.R. 271

.... 147

2 H.L.C. 131

.... 625

10 B. & C. 349, 8 L.J.O.S.K.B.

226 493

Tooley v. Railway Passenger Assur-
ance Co 2 Ins. L.J. 275 11

Toronto, City of, v. Schultz 19 O.W.R. 1013 554, 557

Toronto Cream and Butter Co. v.

Crown Bank 16 O.L.R. 400 648, 650, 653, 655

Toronto Public Library Board v. City

of Toronto 19 P.R. 329, 332 50

Townshend’s (Lord) Settlement, In

re [1908] 1 Ch. 201 528

Trevor v. Whitworth 12 App. Cas. 409 261, 262

Trew v. Railway Passengers Assur-
ance Co 5 H. & N. 211, 7 Jur. N.S. 878. . . 70

Trumble v. Hortin 22 A.R. 51 521

Trusts and Guarantee Co. v. Hart. ... 31 O.R. 414, 2 O.L.R. 251, 32 S.C.

R. 553 207, 309

Tyler, In re [1891] 3 Ch. 252 181

Tyrrell v. Painton [1894] P. 151 205, 206, 215

Tytler v. Canadian Pacific R.W. Co.. 29 O.R. 654 2, 5

Union Steamship Co. Limited v. Clar-

idge [1894] A.C. 185 411, 425

United States v. Bennett 16 Blatchf. (Circuit Court) 338. . 137

United States v. Bradley 10 Peters 343 269

United States Bank v. Dandridge. ... 12 Wheat. 64 270

Valentini v. Canali 24 Q.B.D. 166 455

Yalletort Sanitary Steam Laundry

Co., In re [1903] 2 Ch. 654 650

Vandenbergh v. Spooner L.R. 1 Ex. 316 625

XXX

CASES CITED.

[VOL.

Where Reported.

Page.
. . 207

Name of Case.

Yandusen v. Young 1 O.W.R. 55

Vano v. Canadian Coloured Cotton

Mills Co 21 O.L.R. 144 375

Venner v. Sun Life Insurance Co 17 S.C.R. 394 75, 81

Vezina v. Will H. Newsome Co 14 O.L.R. 658 3

Victoria, County of, v. County of

Peterborough 15 A.R. 617, 627, Cameron’s Sup.

Ct. Cas. 608 199

Victoria Steamboats Limited, In re. . [1897] 1 Ch. 158 649

Waldock v. Winfield

Walker v. Jones

Walker v. Maitland

Wallis y. Andrews

Wallis v. Solicitor-General for New

Zealand

Warburton v. Great Western R.W. Co.

Ward v. Robins

Warmoll v. Young

Warr v. Jolly

Waterhouse v. Jameson

Waters v. Merchants’ Louisville In-
surance Co ,

Waters v. Waters

Waugh v. Waugh

Weatherston v. Hawkins

Webster’s Estate, In re

Welton v. Saffery

Westbrook v. Australian Royal Mail

Steam Navigation Co

Western National Bank of City of New

York v. Perez Triana & Co

Westmeath’s (Lord) Case

Weston Local Option By-law, Re ....

Wharton v. Masterman ....

White, In re

White v. Bastedo

White v. Newcomb

White v. Tomalin

White v. Wilson

Wicks v. Dowell & Co. Limited

Wilkinson v. Alston

William Whiteley Limited v. The King

Williams, Re

Williams v. Jordan

Williams v. Lake

Williams v. Township of Raleigh

Williston v. Lawson

Wilson v. Kelland

Winspear v. Accident Insurance Co. . .

Winter v. Mouseley

Wood v. Waud

Wood v. Wood

Woolrich, In re

Worthing Corporation v. Heather. . . .

Worthington v. Jeffries

Wright v. Kerrigan

Wright v. Lainson

Wright v. Williams

[1901] 2 K.B. 596 426

L.R. 1 P.C. 50 147

5 B. & Aid. 171, at p. 175 69

16 Gr. 624 207, 307

[1903] A.C. 173 176

L.R. 2 Ex. 30 411

15 M. & W. 237, 242 466

5 B. & C. 660 324

6 C. & C, 497 157

L.R. 2 H.L. Sc. 29, at p. 38. .... 570

11 Peters (S.C.) 213 69

2 DeG. & Sm. 591, 599 86

2 My. & K. 41 298

1 T.R. 110 155, 157

23 Ch.D. 737, 739 299

[1897] A.C. 299 258, 260

23 L.J.N.S.C.P. 42 332, 338

[1891] 1 Q.B. 304 6

Jacob 251, note (c) 605

9 O.W.R. 250 340

[1895] A.C. 186. .. , 177

[1893] 2 Ch. 41 174

15 Gr. 546 407

25 App. Div. N.Y. 397, 401. . . ... 159

19 O.R. 513 625, 629

13 Ves. 87, at p. 91 86

[1905] 2 K.B. 225 57, 68

48 L.J.Q.B. 733 43, 45, 47

101 L.T.R. 741 120

5 O.L.R. 345 295

7 O.L.R. 156 404, 407

6 Ch.D. 517 624

2 E. & E. 349 629

14 P.R. 50 332, 333, 338

19 S.C.R. 673 625

[1910] 2 Ch. 306.. 649

6 Q.B.D. 42 57, 58, 66, 73

2 B. & Aid. 802, at p. 806 120

3 Ex. 748 474

57 L.J.N.S. Ch. 1 7

11 Ch.D. 663 295

[1906] 2 Ch. 532, at p. 538 177

L.R. 10 C.P. 379... 401

[1911] 2 I.R. 301 78

2 M. & W. 739 324

1 M. & W. 77 466

XXVI.

CASES CITED.

XXXI

Name of Case. Where Reported. Page.

Wyatt v. Attorney-General of Quebec . [1911] A.C. 489 458, 465

Wylson v. Dunn 34 Ch.D. 569 626

Yeap Cheah Neo v. Ong Cheng Neo. . L.R. 6 P.C. 381 105, 108, 110

Yeates v. Reed 4 Blackf. (Ind.) 463, 465 159

Yorkshire Woolcombers Association

Limited, In re [1903] 2 Ch. 284 649

Young y. Travellers Insurance Co. ... 80 Me. 244 11

REPORTS OF CASES

DETERMINED IN THE

COURT OF APPEAL

AND IN 1HE

HIGH COURT OF JUSTICE FOR ONTARIO.

[DIVISIONAL COURT.]

McMulkin v. Traders Bank of Canada.

Attachment of Debts — Money Deposited in Bank at Branch out of On-
tario — Residence of Garnishees — Service of Attaching Order — Locality
of Debt — Subrogation of Judgment Creditor to Rights of Debtor — •
Con. Rules 162, 911 et seq. — Extra-territorial Recognition of Judgment
—Residence of Debtor.

D. C.
1912

March 2.

Under Con. Rules 911 et seq., a debt may be attached to answer a judg-
ment, (a) if the garnishee is within Ontario, or (6) if the garnishee is
out of Ontario, and the case would fall within one or more of the clauses
of Con. Rule 162 (as to service of original process out of Ontario) if
the judgment debtor was himself seeking to assert his rights within
Ontario.

The money attached was deposited by the debtor in a branch in the Prov-
ince of Alberta of a bank having its head office in Ontario. The attach-
ing order was served on the bank at the head office, and reached the
branch in Alberta before any demand by the debtor: —

Held, that the order should be made absolute.

The King v. Lovitt, [1912] A.C. 212, distinguished upon the ground that
the Rules as to attachment of debts are not based upon the locality of
the debts.

The question whether the judgment of an Ontario Court would be accord-
ed recognition in a foreign country is not one to be considered by the
'Court.

Judgment of Finkle, Co. C.J., Oxford, upon the trial of a garnishee issue,
reversed.

An appeal by the plaintiff (judgment creditor) from the
judgment of Finkle, Co. C.J., Oxford, upon the trial of a garnishee
issue.

The following statement is taken from the judgment of Mid-
dleton, J. : —

ONTARIO LAW REPORTS. [vol.

D, C.
1912

The facts are not in dispute. On the 8th August, 1911, the
plaintiff recovered a judgment against one Couldridge for $211.33.

McMulkin

V .

Traders
Bank
of Canada

On the 17th August, 1911, the plaintiff obtained a garnishee order
nisi, attaching any debt due from the Traders Bank of Canada,
the defendants in the issue, to the judgment debtor. This
order was served on the manager of the Traders Bank of Canada
at Ingersoll, on the 17th August, and upon the manager at the
head office at Toronto, on the 18th August.

An issue was directed between the attaching creditor and the
garnishees for the purpose of determining whether, at the time of
the service of the said order, there was any amount owing from the
garnishees to the judgment debtor, and whether the garnishee
order “was a valid attachment of such debt.”

At the trial the learned Judge found against the attaching
creditor, no /reasons being assigned.

It appeared that, at the time of the recovery of judgment,
the judgment debtor had $3,415 upon deposit in the branch of
the Traders Bank of Canada at Ingersoll. This sum was with-
drawn, and on the 9th August was deposited with the branch
of the bank at Calgary. When the attaching order was served,
it was accompanied by a notice addressed to the bank, warning
the bank that the money sought to be attached was upon deposit
with the Calgary branch. The general manager forwarded the
attaching order to Calgary. It reached the Calgary office before
banking hours on the 24th. Notwithstanding this, the bank
permitted the withdrawal of the whole $3,415, and it was upon the
same day redeposited by the judgment debtor to his own credit
“in trust;” and, later on in the same day, the money so deposited
was again withdrawn.

February 22. The appeal was heard by a Divisional Court
composed of Falconbridge, C.J.K.B., Teetzel and Middleton,
JJ.

J. B. Clarke, K.C., for the appellant. The question is, whether
the order binds the branch of the bank in Alberta. I submit that
it does. The bank, not the branch, is the debtor.

The branch is merely an agent of the bank for

certain purposes. The bank is subject to the jurisdic-

tion of the Courts here. I refer to Tytler v. Canadian
Pacific R.W. Co. (1898), 29 O.R. 654; Ferguson v. Carman (1866),

XXVI.]

ONTARIO LAW REPORTS.

26 U.C.R. 26; Prince v. Oriental Bank Corporation (1878), 3 App.
Cas. 325; The King v. Lovitt, [1912] A.C. 212. The test is, not
the situs of the debt; but, could the debtor sue in Ontario to
recover the debt due him by the garnishees? See Con. Rule 911.*
R. McKay, K.C., for the respondents. This money was not
a debt in Ontario which could be ordered by the Ontario Courts
to be paid over. The Traders Bank of Canada is a corporation
having its head office in the Province of Ontario, but it is domiciled
in every Province where it has offices. A judgment from this
Court would not have the required effect in the Province of Alberta.
It is the situs of the debt that governs. In order that the Ontario
garnishment process may apply, the debt must be present here
in Ontario. I refer to Deacon v. Chadwick (1901), 1 O.L.R. 346;
Vezina v. Will H. Newsome Co. (1907), 14 O.L.R. 658; Brennan v.
Cameron (1910), 1 O.W.N. 430; Pavey v. Davidson (1896), 23
A.R. 9; S.C., sub nom. Purdom v. Pavey & Co. (1896), 26 S.C.R.
412; In re Maudslay Sons & Field, Maudslay v. Maudslay Sons &

D. C.
1912

McMulkin

Traders
Bank
of Canada

*911.(1) The Court or a Judge, upon the ex parte application of the
judgment creditor, either before or after the oral examination mentioned
in Rules 900 to 904 and 910, and upon affidavit by him or his solicitor, or
some other person aware of the facts, stating that judgment has been re-
covered, that it is still unsatisfied, and to what amount, and that some
third person is indebted to the judgment debtor, and is within Ontario,
may order that all debts owing or accruing from the third person (here-
inafter called the garnishee) to the judgment debtor, shall be attached
to answer the judgment debt; and by the same or any subsequent order
it may be ordered that the garnishee appear before the Court or a Judge
or before such officer as the Court or Judge shall appoint, to shew cause
why he should not pay the judgment creditor the debt due from the gar-
nishee to the judgment debtor, or so much thereof as may be sufficient to
satisfy the judgment debt.

(2) Upon a like application where the garnishee is not within Ontario,
and upon its being made to appear on affidavit that the garnishee is so
indebted to the judgment debtor and that the debt to be garnished is one
for which the garnishee might be sued within Ontario by the judgment
debtor, an order may be made that such, debt shall be attached to answer
the judgment debt; and, by the same or any subsequent order, leave may
be given to serve upon the garnishee, or in such manner as may seem
proper, a notice (which may be embodied in the order), calling upon the
garnishee to appear before the Court or a Judge or before such officer
as the Court or Judge may appoint, to shew cause why he should not pay
the judgment creditor the debt due from the garnishee to the judgment
debtor, or so much thereof as may be sufficient to satisfy the judgment
debt.

(3) The order allowing the notice so to be given shall limit a time
when the motion is to be heard, having regard to the place or country
where or within which the notice is to be served.

(4) Where the garnishee is not within Ontario and is neither a British
subject nor in British dominions, notice of the order according to form
No. 126, and not the order itself shall be served.

ONTARIO LAW REPORTS.

[VOL.

D. C.
1912

McMulkin

Traders
Bank
of Canada

Field, [1900] 1 Ch. 602; Attorney-General for Ontario v. Woodruff
(1907), 15 O.L.R. 416, [1908] A.C. 508; Parker v. Odette (1894),
16 P.R. 69, Con. Rule 911.

Clarke, in reply.

March 2. The judgment of the Court was delivered by Middle-
ton, J. (after setting out the facts as above) : — There is no doubt
that, at the time of the service of the garnishee order, the garnishees
were indebted to the judgment debtor. The only question is,
whether this indebtedness was subject to attachment at the in-
stance of the judgment creditor in the Ontario Courts. This
falls to be determined on Con. Rules 911 et seq. These Rules were
validated by 58 Viet. ch. 13, sec. 42, and 59 Viet. ch. 18, sec. 15.
No notice has been served, as required by sec. 60 of the Judicature
Act, if it is intended to contend that this legislation is ultra vires
of Ontario.

By the Rules in question, it is plain that the intention was to
make exigible to answer a judgment recovered in Ontario: (a)
any indebtedness to the judgment debtor where the garnishee
was within Ontario; or ( b ) where the garnishee was not within
Ontario, but the case would fall within the provisions of Con.
Rule 162 if the judgment debtor was himself seeking to assert his
rights within Ontario. The Rule does not proceed upon any
theory as to the situs of the cause of action to be taken in execu-
tion, but proceeds upon the theory that the creditor has a right to
be subrogated to the position of his debtor, and to assert, for the
purpose of enabling him to obtain satisfaction of the judgment,
any right which the debtor himself could assert. If the garnishee
is within Ontario and can be served within Ontario, the judgment
creditor is given the right to collect any debt due by him to the
judgment debtor. If the garnishee is not within Ontario and
cannot be served within Ontario, then a debt cannot be collected
under this process unless it falls within the classes enumerated
in Con. Rule 162.

This narrows the question for determination to an inquiry
whether the debtor could himself sue in Ontario to recover the
debt due him by the garnishees.

XXVI. ]

ONTARIO LAW REPORTS.

Before the decision of the Privy Council in The King v. Lovitt,
[1912] A.C. 212, no one would have doubted this right. The
question in that case was not one between the bank and its
customer. What was there discussed was the right of New
Brunswick to claim succession duty with respect to moneys on
deposit in the St. John branch of the Bank of British North America.
The head office of the bank was in London, England; the domicile
of the testator was Nova Scotia. The right of the Province to
tax was said to be limited to assets within the Province. It was
argued that the situs of this simple contract debt was either at
the residence of the debtor — i.e ., where its head office was, in
London, England — or the domicile of the creditor, i.e., Nova
Scotia. The Province claimed that the debt was a debt payable
at St. John, and that it was primarily recoverable at St. John;
the contract, properly understood, being a contract to be imple-
mented at the branch of the bank in St. John. The Privy Council
agreed with this, and thought that the locality of the debt was in
truth fixed by the agreement between the parties, and that branch
banks, although agencies of the bank itself, for certain purposes,
may be regarded as distinct trading bodies.

Had our Rules been based upon the locality of the debt to
be taken in execution, this judgment would be conclusive against
the attaching creditor; but, if I am right in thinking that this
is not the test, then the decision has no application. The sole
test given by our Rules is the ability to serve within Ontario, or
the ability to bring the case within Con. Rule 162 if service cannot
be made within Ontario. Had the contract been made between
two residents of Calgary, and had the promise been to pay at
Calgary and nowhere else, so that the parties had given as definite
and complete a locality to the debt as is possible in the case of
simple contract debts, and had the debtor thereafter moved
within Ontario, then the debt would none the less be liable to
attachment under our Rule, which merely requires the existence
of a debt and presence of the debtor within Ontario. The debtor
would not be exempt from suit at the instance of his original cred-
itor if found and served within Ontario, because the Courts of
Ontario have universal jurisdiction in all personal actions, subject
only to their ability to effect service within their own jurisdiction:
Tytler v. Canadian Pacific R.W. Co., 29 O.R. 654.

D. C.
1912

McMulkin

Traders
Bank
of Canada

Middleton, J.

ONTARIO LAW REPORTS.

[VOL.

D. C.
1912

McMulkin

Traders
Bank
of Canada

Middleton, J.

Upon the argument, much was made of the difficulty that
might in some cases arise if the Courts of Ontario were to assume
authority to take in execution a debt of this kind, because, it was
suggested, foreign Courts might not accord to the judgment of
the Ontario Court any extra-territorial recognition. It is a suf-
ficient answer to this to point out that this is a question of policy,
affecting those who make the law, and that it cannot be considered
by the Courts, who are called upon to administer the law as they
find it: Western National Bank of City of New York v. Perez

Triana & Co., [1891] 1 Q.B. 304.

But it is not likely that in this case any such question can
arise, because, at the time of the original suit, the judgment
debtor was resident within Ontario, and he appears to be still
here, as he was served with a notice of this appeal at Ingersoll.

The appeal should be allowed, and the garnishees should be
directed to pay to the judgment creditor sufficient to satisfy the
judgment debt and the costs of the attachment proceedings, of
the issue, and of this appeal.

[DIVISIONAL COURT.]

D - c - Fremont v. Fremont.

1912

Husband and Wife — Alimony — Separation Deed — Payment of Gross Sum —

March 4 Absence of Provision for Maintenance of Wife.

By the terms of a separation deed, husband and wife agreed to live apart,,
and each agreed not to take any proceedings against the other for resti-
tution of conjugal rights and not to annoy or interfere with the other
in any manner whatsoever; the husband agreed to pay the wife $250;
the wife agreed to pay her own debts, save three named accounts, and to
support the two children. No provision was made in the deed for the
maintenance of the wife; she did not covenant not to claim alimony;
nor did she covenant to maintain herself: —

Held, that the sum of $250 could not be regarded as intended for the
maintenance of the wife: it was not so stipulated in the deed; and,
apart from the fact that the sum was inadequate for that purpose, it
might have been a payment made to induce the wife to assume care of
the children.

Atwood v. Atwood (1893-4), 15 P.R. 425, 16 P.R. 50, considered.

Held, also, that the agreement to live apart did not relieve the husband
from his obligation to maintain his wife; and, no provision having been
made for her separate maintenance, she was entitled to alimony.
Judgment of Clute, J., affirmed.

Appeal by the plaintiff from the judgment of Clute, J.,
at the trial, on the 13th December, 1911, awarding the plaintiff
alimony.

XXVI.]

ONTARIO LAW REPORTS.

The marriage took place on the 16th May, 1904. The parties D * c -

cohabited until the 16th November, 1906, upon which day a

separation agreement was entered into, since when the plaintiff Fremont

had been maintaining herself and her two children. Fremont

The trial Judge found, upon conflicting evidence, that the
plaintiff was justified in leaving her husband by reason of his
cruelty and misconduct.

February 23. The appeal was heard by a Divisional Court
composed of Falconbridge, C.J.K.B., Teetzel and Middleton,

JJ.

G. H. Watson, K.C., for the defendant, argued that the sepa-
ration agreement entered into between the plaintiff and the de-
fendant was a complete bar to the action: Bishop v. Bishop,

[1897] P. 138, at p. 149; Clark v. Clark (1885), 10 P.D. 188;

Barry v. Barry, [1901] P. 87. The payment of the $250 by the
husband to the wife freed the husband from any obligation for
maintenance; and the adequacy or inadequacy of this sum made
no difference: Eastland v. Burchell (1878), 3 Q.B.D. 432; Biffin
v. Bignell (1862), 7 Ex. 877. The wife’s maintenance having been
provided for, she cannot sue, any more than could a creditor
for necessaries supplied to her, she having no authority to pledge
his credit. Counsel referred to McGregor v. McGregor (1888),

21 Q.B.D. 424; Hart v. Hart (1881), 18 Ch.D. 670; Atwood v.

Atwood (1893-4), 15 P.R. 425, 16 P.R. 50; Lush on Husband
and Wife, 3rd ed, p. 417 et seq., p. 487 et seq.; Wood v. Wood
(1887), 57 L.J.N.S. Ch. 1.

R. McKay, K.C., for the plaintiff, cited Laf ranee v. Lafrance
(1898), 18 P.R. 62, and Beatty v. Beatty (1909), 1 O.W.N. 243.

Watson, in reply.

March 4. The judgment of the Court was delivered by
Middleton, J.: — The sole question argued before us was as to
whether the provisions of the separation deed preclude the action.

By the terms of this deed, the parties agree to live separate
from each other, and each agrees not to take any proceedings
against the other for restitution of conjugal rights or to annoy
or interfere with the other in any manner whatsoever. The
husband agrees to pay the wife $250 — $50 in cash and the balance
secured by forty promissory notes for $5 each, payable monthly.

D. C.
1912

Fremont

Middleton, J.

ONTARIO LAW REPORTS. [vol.

The wife agrees to pay her own debts, save three named accounts,
and to support the two children.

It is to be observed that there is no provision in this deed
relating to the maintenance of the wife. She does not covenant
not to claim alimony from her husband, nor does she covenant to
maintain herself. The learned trial Judge has taken the view
that the mere agreement to live separately does not relieve the
husband from his obligation to support and maintain his wife.
With this we agree.

A husband, by the act of marriage, undertakes to maintain
and keep his wife, unless she commits adultery; and, when she
is living apart from him under circumstances which justify the
separation, he is bound to maintain her, unless she has expressly
renounced her rights, or she has such means of her own as make
it unnecessary for him to maintain her. If the husband fails
to maintain her, she has what has been called “authority of
necessity” to pledge her husband’s credit. Mr. Watson is
probably right when he takes the position that the same test
can be applied to determine the wife’s right to alimony as in the
case of an action brought against the husband by one who has
supplied his wife with necessaries; the creditor in the latter
case deriving his claim entirely from the wife’s implied authority.

The earlier cases made the adequacy of the provision of the
husband for his wife’s maintenance the test of the limit of her
authority. The later cases have departed from this rule; and
unless the wife is entitled to relief by reason of fraud or duress,
she is now regarded as able to make her own terms, and to agree
to accept a stipulated allowance as being adequate for her main-
tenance.

In this case there is no provision whatever for maintenance,
and there has been no release by the wife of her right to be main-
tained. The wife is entitled to be separately maintained, not
merely because the husband has agreed to her living apart, but
also because the misconduct found by the Judge justifies a sepa-
ration.

The case falls within the words of Lush, J., in Eastland v.
Burchett, 3 Q.B.D. 432, at pp. 435, 436: “If he wrongfully com-
pels her to leave his home, he is bound to maintain her elsewhere,
and if he makes no adequate provision for this purpose, she be-

XXVI. ]

ONTARIO LAW REPORTS.

comes an agent of necessity to supply her wants upon his credit.
In such a case, inasmuch as she is entitled to a provision suitable
to her husband’s means and position, the sufficiency of any allow-
ance which he makes under these circumstances, is necessarily
a question for the jury. Where, however, the parties separate
by mutual consent, they may make their own terms; and so
long as they continue the separation, these terms are binding on
both.”

Here the parties have not made their own terms for the sepa-
rate maintenance of the wife. The husband has made no ade-
quate provision for her, and she is justified in resorting to the
Court for an alimentary allowance.

This case differs from any reported decision; as in all the
reported cases where there was separation, either voluntary or
on account of the husband’s misconduct, the separation deed did
contain an alimentary provision. It is impossible to regard the
lump sum of $250 as being intended for the maintenance of the
wife. The deed does not so stipulate; and, apart from the fact
that that sum is clearly inadequate for this purpose, it may have
been a payment made to induce the wife to assume care of the
children.

In Atwood v. Atwood, 15 P.R. 425, the Chancellor says: “A
separation deed may be well upheld by the payment of a sum
in gross, and a provision to arise de anno in annum is not essen-
tial.” (See also the same case in appeal, 16 P.R. 50.)

No authority is referred to, and I can find no case in which
such a provision was made. A lump sum so paid, enough to
produce an adequate income or to supplement the wife’s own in-
come, might well be sufficient; but a sum such as that paid
here would be so grossly inadequate as to afford in itself conclu-
sive evidence either of duress or improvidence.

In this case it is sufficient to say that upon the deed itself
the sum is not accepted in lieu of alimony.

The appeal should be dismissed with costs.

D.C,

1912

Fremont

Middleton, J.

ONTARIO LAW REPORTS.

[VOL.

[IN THE COURT OF APPEAL.]

Wallace v. Employers’ Liability Assurance Corporation.

Accident Insurance — Temporary Total Disability — Double Indemnity —
“Riding as a Passenger” — Injury to Assured on Highway after Alight-
ing from Street Car.

The judgment of Meredith, C.J.C.P., 25 O.L.R. 80, upon the facts there
stated, was affirmed as to total disability and reversed as to double
indemnity — it being held, that the plaintiff was not “riding as a passen-
ger” upon the street car from which he had alighted when he received
the injuries upon which his claim to the double indemnity was based.

Appeal by the defendants from the judgment of Meredith,
C.J.C.P., 25 O.L.R. 80, in an action upon an accident insurance
policy, in favour of the plaintiff’s claim for temporary total
disability and his further claim for double indemnity, upon the
ground that, when he sustained the accident in respect of which
he claimed, he was “riding as a passenger” upon a public con-
veyance.

January 23. The appeal was heard by Moss, C.J.O., Garrow,
Maclaren, Meredith, and Magee, JJ.A.

N. W. Rowell, K.C., for the defendants, argued that the
plaintiff was not “riding as a passenger” when the accident
occurred. He had alighted, and was merely entitled to the rights
of a person on the public highway. The word “passenger”
implies an intention to travel, while the plaintiff was at his
journey’s end, and was on property not controlled by the railway
company: Booth’s Street Railway Law (1892), sec. 326; see note
on p. 445 and case of Creamer v. West End St. R.W. Co. (1892),
31 N.E. Repr. 391, there cited; also Platt v. Forty-Second St. and
Grand St. Ferry R.R. Co. (1874), 2 Hun (N.Y.) 124. On the
question of intention, he referred to Am. & Eng. Encyc. of Law, 2nd
ed., vol. 1, p. 305, and cases there cited, especially Hendrick v. Em-
ployers’ Liability Assurance Corporation (1894), 62 Fed. Repr. 893.
He referred particularly to the case of Anable v. Fidelity and
Casualty Co. of N.Y. (1906), 63 Atl. Repr. 92, affirmed (1907),
74 N.J.L. 686. He also referred to JZtna Life Insurance Co. v.
Vandecar (1898), 86 Fed. Repr. 282. On the other point in the
case, the evidence, while somewhat conflicting, shewed that the
plaintiff was not wholly disabled by the accident, as he assisted
his wife in looking after the heating of the premises of which

C. A.
1912

March 6

XXVI.]

ONTARIO LAW REPORTS.

they jointly had a lease, and in the buying of necessary stores,
so that he was not entitled to the benefits under the policy arising
from total disability: Am. & Eng. Encyc. of Law, 2nd ed., vol. 1,
p. 336, and cases there cited.

D. Urquhart, for the plaintiff, argued that there was ample
evidence to support the finding of the learned trial Judge that the
plaintiff’s injury wholly incapacitated him from business: Young
v. Travelers Insurance Co. (1888), 80 Me. 244; Hooper v. Acci-
dental Death Insurance Co. (1860), 5 H. & N. 546. On the other
point, reference was made to Theobald v. Railway Passengers
Assurance Corporation (1854), 10 Ex. 45, as the earliest case on
the subject. That case was followed in Powis v. Ontario Accident
Insurance Co. (1901), 1 O.L.R. 54, and shews that a passenger
remains a passenger until he has safely landed at his destination.
The plaintiff could not be said to have alighted safely from the
car until he had got a foot-hold upon the street which he could
maintain. Reference was made to the following cases and authori-
ties: Nellis on Street Railways, 2nd ed., secs. 260,261; Northrup
v. Railway Passenger Assurance Co. (1871), 43 N.Y. 516; May on
Insurance, 4th ed., secs. 521, 524-529 (inch); Tooley v. Railway
Passenger Assurance Co. (1873), 2 Ins. L.J. 275.

C. A.
1912

Wallace

Employers’

Liability

Assurance

Corpora-

tion

Rowell, in reply, argued that the cases cited on behalf of the
respondent were not applicable, and that the Anable case covered
the whole ground.

March 6. Maclaren, J.A. : — This is an appeal by the de-
fendants from a judgment of Meredith, C.J., without a jury,
awarding the plaintiff $1,300 for 26 weeks’ total disability from
injuries received after alighting from a street car in Toronto.
The defendants had issued a policy in the plaintiff’s favour,
insuring him against injuries for $25 a week for “ temporary
total disability;” the amount to be $50 a week if the injuries
were sustained “ while riding as a passenger in or upon a public
conveyance.”

The claim was resisted on the ground that the plaintiff’s
illness and disability were caused not by the alleged injury, but
were due to locomotor ataxia or an aneurism. The trial Judge
found for the plaintiff on this issue; and, although urged in the
reasons for appeal, it was abandoned in the argument before us.

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Wallace

Employers’

Liability

Assurance

Corpora-

tion

Maclaren, J.A.

Another ground of defence was, that the plaintiff was a com-
mercial traveller, but before the accident in question he had ceased
to be such, and had become the keeper of a boarding-house, and
had followed this business during the period claimed for. “ Tem-
porary total disability’ ’ is defined in the policy as arising from
injuries resulting in the “ assured being immediately, continuously,
and wholly disabled, and thereby prevented from transacting
any and every kind of business pertaining to his occupation.”
The trial Judge found as a fact that the boarding-house business
was his wife’s, and not his; and that the trifling assistance he
gave her was not sufficient to affect his claim. This finding
seems to be amply justified by the evidence, and the appeal on
this ground should be dismissed.

The third ground of appeal is more serious. It is contended
by the defence that, even if the plaintiff were entitled to $25 a
week, he is not entitled to $50 a week, or the double allowance,
as his injuries were not sustained while he was “ riding as a pas-
senger in or upon a public conveyance.”

The word “ passenger” had been variously defined, and it
is difficult to frame a definition that would be of general applica-
tion. It usually means one who travels or is carried in a vessel,
coach, railway or street car, or other public conveyance, entered
by fare or contract express or implied. The precise time at which
the traveller becomes a passenger or ceases to be such depends
upon the facts of the particular case. If the carrier owns or con-
trols the station, platform, or other premises where the journey
begins or terminates, the relation of carrier and passenger may
begin sooner and terminate later than in the case of a tram or
street car, where the carrier has no control over the place of de-
parture or arrival. In the present case we have not to determine
whether the plaintiff had ceased to be a passenger with reference
to the Toronto Railway Company when he received the injury
complained of, but whether at that time he was “ riding as a pas-
senger in or upon a public conveyance.”

The facts of the case as given by the plaintiff in his evidence
are quite simple. He was a passenger on an open street car in
the city of Toronto, which stopped to let him off at the regular
stopping place, just opposite his home. When he stepped on the
ground, an automobile going in the same direction was about

XXVI.]

ONTARIO LAW REPORTS.

to run him down, and to save himself he tried to get on the street
car again, which by this time was in motion. He says he reached
out to catch hold of the handle of the car, and was jerked around,
and fell between the car and automobile, his head striking the
side of the car as he fell.

We were not referred to any Canadian or English case precisely
in point; but there are a number of American cases that are
very similar to the present one.

In Creamer v. West End St. R.W. Co. (1892), 156 Mass. 320,
a passenger had taken one or two steps from where he touched the
ground on leaving his car and was struck by another car. The
Court said: “We are of opinion that he was not a passenger
when the accident occurred, and, that he ceased to be a passenger
when he alighted upon the street from his car. The street is in
no sense a passenger station, for the safety of which a street railway
company is responsible. When a passenger steps from the car
upon the street, he becomes a traveller upon the highway, and
terminates his relations and rights as a passenger, and the railway
company is not responsible to him as a carrier for the condition
of the street, or for his safe passage from the car to the sidewalk.”

In Platt v. Forty-Second St. and Grand St. Ferry R.R. Co., 2 Hun
(N.Y.) 124, the plaintiff had left the company’s car and was pass-
ing the horses which had been drawing it, when one of them
injured her. It was held that she had ceased to be a passenger
on tfee car, and that the liability of the company, if any, was not
that of a common carrier, but depended upon the principles
that apply to all persons lawfully using the highway.

C. A.
1912

Wallace

Employers ’
Liability
Assurance
Corpora-
tion

Maclaren, J.A.

Anable v. Fidelity and Casualty Co. of N.Y., 73 N.J.L. 320
(1906), was an action on a policy in the same terms as the one in
this case — providing for double indemnity for an injury “while
riding as a passenger in or upon a public conveyance.” While
the train was at a station, the assured stepped on the
station platform to buy a paper. The train started, and the as-
sured grasped the handrail of one of the cars, but fell, and the last
car passed over his body, killing him instantly. The trial Judge
held that the rights of the parties must be ascertained by the
plain natural meaning of the language used; that he was not in a
car nor on a car, nor on any part of a train at the time of the injury;
that he was insured not simply as a passenger, but was entitled

C.A.

1912

Wallace

Employers’

Liability

Assurance

Corpora-

tion

Maclaren, J.A.

ONTARIO LAW REPORTS. [vol.

to the double indemnity only if the injury was received while within
or on the car or other public conveyance, which was considered a
less hazardous risk than while in the act of getting on or off,
which might involve a considerable degree of peril. This judg-
ment was affirmed and approved unanimously by the appellate
Court of eleven Judges: 74 N.J.L. 686 (1907).

The reasoning in this last case commends itself to my judgment.
In the present case the plaintiff was not in fact either in or on the
car when he received the injury. If he had been, he would not
have been injured. It is common knowledge that the vast
majority of street car accidents to passengers occur in connection
with entering or leaving the car, injuries to those in or on the cars
being limited to the rarer cases of collisions or the car running
off the track. I do not think that the language of the policy
should be strained so as to cover a risk which does not come within
its terms; and a risk for which the proper premium was not paid.

I am further of opinion that the plaintiff was not even a “ pas-
senger/’ within the meaning of the policy, at the time he received
the injury. He had fully completed the journey for which he
had entered the car and paid his fare. The car had stopped at
his request at the very spot at which he desired to alight, and with
which he was very familiar, as it was almost at his own door.
He had completely separated himself from the car and was se-
curely landed on the roadway. His subsequent attempt to lay
hold of the car and get upon its steps was not for the purpose of
resuming his journey or again becoming a passenger on the car,
and was in no way connected with his having been a passenger
a short time previously. His position was the same as that of
any foot-passenger on the street who might find himself in the
same peril, and might try to take refuge from the deadly auto-
mobile. But I do not think it is necessary to decide whether,
at the time of the accident, he was a passenger or not; it is suffi-
cient that he was not then “ riding as a passenger in or upon a
public conveyance.”

In my opinion, the plaintiff is entitled only to single and
not to double indemnity, and the $1,300 awarded him should
be reduced to $650.

There should be no costs of the appeal.

XXVI.]

ONTARIO LAW REPORTS.

Meredith, J.A. : — The first question is, whether the plaintiff,
at the time of his injury, was ‘'riding as a passenger in or upon”
the street car; and is not the broader one whether, at that time,
he might be considered merely a passenger as against the railway
company.

He had been a passenger riding in and upon the street car,
but had reached his destination, the car had been stopped to let
him down, and he had alighted upon the public road, severing
entirely all actual connection between himself and it; but, being
put in imminent danger by a rapidly approaching motor car,
he caught at the street car again, though it had by that time been
started again and was in motion; and, in endeavouring to escape
injury from the motor car by getting upon the street car, fell, or
was thrown down, coming in contact with the moving cars,
and so was severely injured. His purpose in trying to get upon
the street car again was not to resume his journey; that was ended;
nor was it to begin a new journey; it was solely to escape injury
by the negligently-driven motor car. It is idle to say that there
was negligence on the part of the railway company, if that would
make any difference; how could their servants foresee and be
blameable for the misconduct of the driver of the motor car? It
was at the plaintiff’s instance, and upon his signal, that the street
car was stopped at this alighting place; an entirely proper place
to stop for that purpose; the danger was something not foreseen
by the plaintiff or any one else, because doubtless not apparent
until the motor car was almost upon him; avoidable, with any
sort of care on the part of its driver, up to almost the last moment.

Under these circumstances, it is impossible for me to find
that the man was “riding in or upon” the street car when he was
injured; if he had been in or upon the street car, he would not
have been injured as he was. The case would have been different
if he had, after alighting, boarded the car again with the intention
of resuming his journey, or of beginning a new one; but nothing
like that was the case. Their plain meaning ought to be given
to plain words, even though the result be different from that
which one would prefer. And such is the effect of the cases in
the Courts of the State of New Jersey, which, though very much
in point, were not referred to at the trial.

The case, therefore, is not one for “double indemnity” under

C. A.
1912

Wallace

Employers ’
Liability
Assurance
Corpora-
tion

Meredith, J.A.

ONTARIO LAW REPORTS. [vol.

C. A.
1912

the policy in question, but for single indemnity; and the amount
of the judgment entered for the plaintiff ought to be reduced

Wallace

V .

Employers ’
Liability
Assurance
Corpora-
tion

accordingly.

The appeal upon the other ground fails entirely; there is
ample evidence to support the finding that the plaintiff’s injury
caused him “ temporary total disability,” within the meaning of
those words contained in the policy.

Meredith, J.A.

Moss, C.J.O., Garrow and Magee, JJ.A., concurred.

Appeal allowed in part.

[IN THE COURT OF APPEAL.]

C.A.

1912

Rex v. Sovereen.

March 6

Criminal Law — Keeping Disorderly House — Indictment at Sessions — Con-
viction — Evidence to Sustain — Judge's Charge — Reference to Convic-
tion of Previous Occupant — Right of Prisoner, after Indictment
Found, to Elect Trial without Jury — Criminal Code, secs. 2:25, 228,
825, 873 — Re-election — Notice to Sheriff.

The defendant was indicted at the Sessions for keeping a disorderly house,
that is to say, a common bawdy house, contrary to secs. .228 and 225
of the Criminal Code, and was tried by a jury and found guilty. Upon
a case reserved by the Chairman of the Sessions: —

Held, that there was valid evidence that the defendant was the keeper of
a disorderly house; and that a reference, in the Chairman’s charge to
the jury, to a woman who had been previously convicted, was not
erroneous.

2. The defendant had been committed for trial by a magistrate, but the
indictment on which he was convicted was not preferred by the person
(if any) bound over to prosecute, but by the County Crown Attorney,
with the written consent of the trial Judge, under sec. 873 of the Code.
After a true bill had been found by the grand jury, and before arraign-
ment or plea, the defendant asked to be allowed to elect to be tried
by the County Court Judge without a jury under the Speedy Trials
sections of the Code: —

Held, that he was not entitled so to elect.

Per Moss, C.J.O.: — Where a person committed for trial, and whether in
custody or upon bail, has not, before a bill of indictment has been
found against him by a grand jury, taken the steps necessary to enable
him to elect to be tried by a Judge without a jury, he is not, upon bill
found and arraignment thereon, entitled as of right to ask to be allowed
to elect to be tried without a jury. The right is given only in cases in
which the exercise of such an election would or might effect a speedy
trial of an accused person, and thereby save the delay which waiting for
a trial by jury might involve.

XXVI.]

ONTARIO LAW REPORTS.

Per Maclaren, J.A. : — It must be assumed that the charge in the indict-
ment was not the same as that upon which the defendant was committed,
or as any other charge appearing in the evidence before the magis-
trate, as, in either of these events, the County Crown Attorney would
not, under sec. 871, have needed the consent of the Judge to prefer the
indictment; and it is clear from sec. 825 et seq. of the Code that a
speedy trial before a Judge can be had only upon a charge on which
the magistrate has committed the accused, or upon one which appears in
the evidence before him. But, even if the indictment had been based
upon a charge for which the accused had been committed or which ap-
peared in the depositions, he should have elected before the true bill
was found by the grand jury.

The King v. Komiensky (1903), 6 Can. Crim. Cas. 524, and The King
v. Wener (1903), 76. 406, approved.

Per Magee, J.A. : — Rex v. Thompson (1908), 17 Man. L.R. 508, approved.
Per Maclaren and Magee, JJ.A. : — The defendant, not having given
to the Sheriff the notice required by sub-sec. 6 of sec. 825 of the Code
(as added by 8 & 9 Edw. VII. ch. 9), was not in a position to claim
the right to re-elect.

Case stated by the Chairman of the General Sessions of the
Peace for the County of Norfolk.

The accused, Wilbert Sovereen, was indicted at the Sessions
in December, 1911, for that he on the 23rd July, 1911, and on
other days and times before that date, did keep a disorderly house,
that is to say, a common bawdy house, contrary to secs. 228 and
225 of the Criminal Code, and was found guilty by the jury.

The indictment was not preferred at the instance of the person
bound over to prosecute, but by the County* Crown Attorney,
with the written consent of the Chairman, under sec. 873 of the
Criminal Code. After a true bill had been found by the grand
jury, but before arraignment or plea, the prisoner desired to be
allowed to elect to be tried before the County Court Judge without
a jury, under the Speedy Trials sections of the Code. On its being
held that he was not entitled so to elect, he pleaded “not guilty.”

The Chairman, on the application of the prisoner’s counsel,
reserved for the Court the following questions: —

1. Was there any valid evidence that the prisoner was the
keeper of a disorderly house?

2. Was my charge erroneous as regards the reference made
therein to the woman who had been previously convicted ?

3. Was the prisoner, in the circumstances above stated, en-
titled to make an election for speedy trial ?

February 20. The case was heard by Moss, C.J.O., Garrow,
Maclaren, and Magee, JJ.A., and Latchford, J.

2 — XXVI. O.L.R.

C. A.
1912

Rex

Sovereen

ONTARIO LAW REPORTS.

0. A.
1912

Rex

SOVEREEN

[vol.

J. B. Mackenzie, for the prisoner, argued that the evidence
as to the character of the house under the previous occupant was
inadmissible; and that, as the law now stands, a person out on
bail is entitled to elect to be tried by a Judge without a jury:
Criminal Code, sec. 825, sub-secs. 6 and 7, added by 8 & 9 Edw.
VII. ch. 9.* There is no reported case since the amendment
of the Code by the statute of 8 & 9 Edw. VII. Reference
was made to the following cases: Rex v. O’Gorman (1909), 18
O.L.R. 427; The Queen v. Laurence (1896), 1 Can. Crim. Cas. 295;
The King v. Komiensky (1903), 6 Can. Crim. Cas. 524; The King
v. Wener (1903), 6 Can. Crim. Cas. 406; Regina v. St. Clair (1900),
27 A.R. 308; Regina v. McNamara (1891), 20 O.R. 489.

J. R. Cartwright, K.C., for the Crown, argued that the evidence
was sufficient to support the conviction, and that the prisoner
was not entitled to elect to be tried without a jury after a bill of
indictment had been found against him.

March 6. Moss, C.J.O. : — We are all agreed that the questions
submitted by the learned Chairman of the General Sessions should
be answered adversely to the contentions made on behalf of the
prisoner.

As to the first and second questions, having regard to the
evidence and the charge to the jury, which are made part of the
stated case, there can be no reasonable doubt.

The third question affords more room for difference of opinion —
not, however, as to what the proper conclusion should be, hut
rather as to grounds upon which it should be based.

Speaking for myself, and with the utmost respect for those
who have indicated or expressed a different view, I think that
where, as here, a person committed for trial, and whether in custody
or upon bail, has not, before a bill of indictment has been found
against him by a grand jury, taken the steps necessary to enable

*6. A person accused of any offence within sub-section 1 of this sec-
tion, who has been bound over by a Justice or Justices under the provisions
of section 696 and is at large under bail, may notify the Sheriff that he
desires to make his election under this Part, and thereupon the Sheriff
shall notify the Judge, or the prosecuting officer, as provided in section
826.

7. In such case, the Judge having fixed the time when and the place
where the accused shall make his election, the Sheriff shall notify the
accused thereof, and the accused shall attend at the time and place so
fixed, and the subsequent proceedings shall be the same as in other cases
under this Part.

XXVI.]

ONTARIO LAW REPORTS.

him to elect to be tried by a Judge without a jury, he is not, upon
bill found and arraignment thereon, entitled as of right to ask to be
allowed to elect to be tried without a jury. If that is not the effect
of the legislation, it places it in the power of the accused not merely
to postpone his trial, but to render futile all that has been done
by the grand jury, and necessitate a compliance with all the forms
prescribed by sec. 827 of the Code, including the preparation and
preferring by the prosecuting officer of a charge in accordance
with the directions given in sec. 827 (3).

I am unable to think that it was the intention to give an accused
person the general right to elect to be tried without a jury. On
the contrary, I think that the intention was to give it only in cases
in which the exercise of such an election would or might effect a
speedy trial of an accused person, and thereby save the delay
which waiting for a trial by jury might involve.

And I do not think the legislation extends the right beyond
that point.

I agree that the first question should be answered in the
affirmative and the second and third in the negative, and that the
conviction should stand.

Maclaren, J.A. : — The accused in this case was tried at the
General Sessions of the County of Norfolk before Robb, County
Court Judge, and a jury, and was convicted of keeping a disorderly
house. He had been committed for trial by a magistrate, but the
indictment on which he was convicted was not preferred by the
person bound over to prosecute, but by the County Crown At-
torney, with the written consent of the trial Judge, under sec. 873
of the Criminal Code. After a true bill had been found by the
grand jury, and before arraignment or plea, the prisoner desired
to elect to be tried before the County Court Judge without a
jury, under the Speedy Trials Act (Part XVIII. of the Criminal
Code). On its being held that he was not entitled so to elect,
he pleaded “not guilty.” At the close of the trial, the Judge,
on the application of the prisoner’s counsel, reserved for this
Court the following questions: —

1. Was there any valid evidence that the prisoner was the
keeper of a disorderly house ?

2. Was my charge erroneous as regards the reference made
therein to the woman who had been previously convicted ?

C. A.
1912

Rex

SOVEREEN
Moss, C.J.O.

ONTARIO LAW REPORTS. [vol.

3. Was the prisoner, in the circumstances above stated,
entitled to make an election for speedy trial ?

As to the first question, I am of opinion that there was ample
evidence, if believed by the jury, to prove that the house in question
was a disorderly house, and that he was the keeper. The house
belonged to him and also the furniture, and he used it when working
the farm with which it was connected, which was some two or
three miles from his homestead. The evidence points strongly
to his having been a joint occupant or keeper with the woman said
to have been convicted in October, 1910, and to his being the sole
keeper after that tiiiie, the house being occupied from time to
time by disreputable women. The house retained the same
character and reputation after October, 1910, as before; and the
admissions made by the witness who did the chores about the
house for the prisoner — and made very reluctantly — are quite
sufficient alone to justify the conviction. This question should
be answered in the affirmative.

As to the second question, what the trial Judge said in his
charge on the subject was this: “It has been suggested that the
woman who has been already convicted was the keeper; but I
think that we have nothing to do with that in this case. I think
that, no matter whether she was convicted or not, you have got
to try this case upon the evidence that has been presented before
you; and, if you come to the conclusion that the prisoner is the
keeper or was at any time the keeper of this house, you should
find him guilty, giving him, of course, the benefit of any doubt
that you may have.” I fail to see on what grounds the prisoner
could properly complain of this charge. This question should,
in my opinion, be answered in the negative.

The third question should also, in my opinion, be answered
in the negative. Part XVIII. of the Criminal Code (secs. 822 to
842 inclusive), relating to “Speedy Trials of Indictable Offences,”
has reference exclusively to prosecutions based upon an informa-
tion or complaint and a preliminary examination before a magis-
trate. It is true that there was in this case a preliminary examina-
tion before a magistrate, and the prisoner was committed for
trial. But this was not followed up by an indictment based
upon the charge for which he was committed, “or for any charge
founded upon the facts or evidence disclosed on the depositions

XXVI.]

ONTARIO LAW REPORTS.

f taken before the Justice/’ as might have been done under the
provisions of sec. 871 of the Criminal Code. It does not appear
from the reserved case whether or not the complainant before the
magistrate was present at the Sessions; but, whether or not, the
County Crown Attorney might prefer an indictment for the
charge upon which the prisoner was committed or for any charge
founded on the facts or evidence disclosed in the depositions:
Criminal Code, sec. 872. The Deputy Attorney-General informed
us at the argument that his instructions were, that no one was
bound over to prosecute, although the reserved case would lead
one to infer that some one had been so bound; but, in my opinion,
in the circumstances of this case, this was quite immaterial.

The fact is, that the depositions and the committal were
both ignored, and were not followed by the person bound over to
prosecute, if there was such a person, or by the County Crown
Attorney. Instead of this, the County Crown Attorney, under
sec. 873, obtained the written consent of the Judge to prefer the
indictment set out in the reserved case, on which a true bill was
returned by the grand jury, and on which the petty jury returned
a verdict of “ guilty.” The depositions taken before the magis-
trate were not made a part of the reserved case, and counsel for
the prisoner did not, before us, ask or even suggest that they
should be made a part of it. In the circumstances, we must,
I think, assume that the charge in the indictment is not the same
as that for which the prisoner was committed, or any other charge
appearing in the evidence before the magistrate, as, in either of
these events, the County Crown Attorney would not, under sec.
871, have needed the consent of the Judge to prefer the indictment.

It is quite clear from sec. 825 and the succeeding sections of
the Code that a speedy trial before a Judge can be had only upon
a charge on which the magistrate has committed the accused,
or upon one which appears in the evidence before him. As said
by Wurtele, J., in The King v. Wener, 6 Can. Crim. Cas. 406, at
p. 413: “The Criminal Code does not prescribe that an accused
can elect to be tried without a jury when, without a preliminary
inquiry or without a committal or an admission to bail, and
subsequent custody for trial, a bill of indictment has been preferred
by the Attorney-General or by any one by his direction, or with
the written consent of a Judge of a Court of criminal jurisdiction,

C. A.
1912

Rex

SOVEREEN
Maclaren, J.A.

ONTARIO LAW REPORTS.

C. A.
1912

Rex

SOVEREEN
Maclaren, J.A.

[VOL.

or by order of such Court, and thus remove the prosecution from
the forum to which it properly belongs to another to which juris-
diction has not in such case been given by law. In the absence
of any statutory provisions or statutory authority an accused
has no right in such a case to demand and obtain a trial in any
other Court than the one in which the indictment was found,
and which has jurisdiction over the case, and is seized with it.”

As stated above, the indictment in this case did not originate
with and is not based upon a charge or depositions taken before
a magistrate, but is based solely upon the written consent given
by the trial Judge, and the Code does not provide for a trial before
a Judge without a jury in such a case.

. But, even if the indictment had been based upon a charge
for which the accused had been committed or which appeared in
the depositions, I am of opinion that he should have elected before
the true bill was found by the grand jury. I agree with what is
said by Wurtele, J., in the Wener case, at the page above cited.
He there says: “If no election has been made before an indict-
ment is returned founded on the facts or evidence disclosed by the
depositions taken at the preliminary inquiry, the accused has no
statutory right to demand a trial before a Judge of Sessions
without a jury, and avoid a trial on the indictment.” In another
case of The King v. Komiensky , in the same volume, at p. 528,
the same Judge says: “On the finding of true bills, the Court is
finally seized with the prosecution, and exclusive jurisdiction
over them is vested in the Court, which is the only competent
forum or tribunal to carry them in due course and in the ordinary
way to their final stage of either conviction or acquittal by the
petty jury.” On the other hand, in a Manitoba case, Rex v.
Thompson (1908), 17 Man. L.R. 608, it was held by Howell, C.J.A.,
that a prisoner may elect up to the time of pleading. I can find
nothing in the Code to justify this position, and, in my opinion,
it is quite contrary to the genius and spirit of the Speedy Trials
Act (now Part XVIII. of the Code). I am of opinion that the cor-
rect doctrine is that laid down as above by Wurtele, J. To hold
otherwise would be to defeat the very object and purpose of the
legislation, and the title of “Speedy Trials” would become a
veritable misnomer, and provisions that were designed and en-

XXVI.]

ONTARIO LAW REPORTS.

acted to speed trials would be converted into machinery to retard
and delay.

But there is also, in addition, another difficulty in the way of
the prisoner. Having been bound over under sec. 696, and being
under bail, if he desired to elect, he should have given the notice
of such desire to the Sheriff, as required by sub-sec. 6, added to
sec. 825 of the Code by the amending Act of 1909, 8 & 9 Edw. VII.
ch. 9. This he did not do, so that he did not take the first step
to secure such right. It may be said that this objection is a
technical one. But, if the prisoner is claiming a privilege so much
at variance with the spirit and object of the legislation, he should
at least shew some compliance with the plain provisions laid down
in the legislation.

C. A.
1912

Rex

SOVEREEN
Maclaren,, J.A.

For these reasons, and especially on the ground first set forth,
which, in my judgment, is quite sufficient, I am of opinion that the
third question should be answered in the negative.

Magee, J. A.:- — Reserved case stated by the Chairman of the
General Sessions of the Peace for the County of Norfolk.

The accused, Wilbert Sovereen, was indicted before that
Court in December, 1911, for that he, on the 23rd day of July,
1911, and on other days and times before that date, did keep a
disorderly house, that is to say, a common bawdy house, contrary
to secs, 228 and 225 of the Criminal Code. The jury found him
“ guilty.”

Under sec. 228, this is an indictable offence. There is no
limitation of time for the commencement of a prosecution for it.
Consequently, it was open to adduce evidence such as was given,
going as far back as May, 1910. It was objected that such evi-
dence was inadmissible, because, under sec. 1142, in the case of an
offence punishable upon summary conviction, the complaint must
be made or information laid within six months, and under sec. 774
(amended by 8 & 9 Edw. VII, ch. 9) a “magistrate,” as defined
in sec. 771, could, without the assent of the accused, summarily
try a person charged with keeping a disorderly house. But Part
XVI., which includes sec. > 774, relates to indictable offences, and
not to offences punishable under summary convictions, which
are dealt with by Part XV. The only provisions of the Code
under which the keeper of a disorderly house or bawdy house can

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Rex

SOYEREEN

Maeee. J.A.

be punished by summary conviction are secs. 238 and 239, the
former of which declares every one who is the keeper of such a
house to be “a loose, idle or disorderly person or vagrant ;” and
sec. 239 makes “a loose, idle or disorderly person or vagrant”
liable to fine or imprisonment or both. But that punishment
is not for keeping the house, it is for being “a loose, idle or dis-
orderly person or vagrant.” In The Queen v. Stafford (1898),

1 Can. Grim. Cas. 239, although the charge was for being “the
keeper of a common bawdy house,” it is evident that the proceed-
ings must have been taken under the sections then corresponding
to secs. 238 and 239, and the imprisonment was held to be un-
authorised by them. As the offence here charged is punishable
only by indictment, sec. 1142 does not apply.

It was shewn that the defendant was the owner of the house
in question, which was situate on a parcel of 45 acres of land
owned by him. He resided about two and a half miles away.
The house was “formerly occupied” by one Mrs. Denby. There
is some reference to the fact of her having been arrested and
convicted, but for what does not appear. Presumably it was for
keeping this disorderly house. She left in October, 1910. During
her occupancy, there is evidence of other women being there at
various times, and men, and of the evil reputation of the house,
and of instances of prostitution by inmates, and of lewd conduct
by this defendant with Mrs. Denby and another woman, and of his
having been “hundreds of times” in the bed-room with the
former, and of his having invited there one witness who was there
several times, and says the house was one of ill-fame, and that
this defendant and Mrs. Denby were the keepers — the people
who were running the house. As to this, the witness was hardly
cross-examined. This was clearly “some valid evidence” to
shew that the defendant was a keeper of a common bawdy house,
under sec. 228.

Since October, 1910, the house, though furnished by the de-
fendant, has been vacant, unless when he occasionally stopped
there. The presence of one or two women there on three oc-
casions, weeks apart, is shewn, but not the time of day, except
once at night, nor the length of their stay. Both of them had
been there in Mrs. Denby’s time. There is no evidence of any
improper conduct or of other men being there. There is not,

XXVI.]

ONTARIO LAW REPORTS.

I think, sufficient proof of the existence of a common bawdy
house there during this period.

In his charge to the jury, the learned Chairman, after pointing
out that the defendant was the owner of the house, said: “It
had been suggested, however, that the woman who had already
been convicted was the keeper; but I think that we have nothing
to do with that in this case. I think that, no matter whether she
was convicted or not, you have got to try this case upon the
evidence that has been presented before you.” I am at a loss to
discover any objection to this, or indeed why the learned Chairman
was indulgent enough to reserve any question upon it.

Another question remains as to the right of the Court to try
the defendant. The statement of the case sets out these facts:
“The prisoner had been committed for trial after the preliminary
hearing, and admitted to bail, and appeared, as provided by his
recognizances, for trial at the above-named General Sessions of
the Peace. The bill of indictment was, however, not preferred
by the person bound over to prosecute, but was preferred under
directions given by the trial Judge, as provided by sec. 873 of the
Criminal Code. Before arraignment or plea, the prisoner desired
to elect trial by the County Court Judge, but it was held that he
was not entitled, under the circumstances, so to elect.” I
assume that the information laid, the preliminary hearing
had, and the defendant’s recognizance to appear for trial, were all
upon the same charge as the indictment.

It is only under sub-secs. 6 and 7 of sec. 825 of the Criminal
Code, 1906, as added in 1909 by 8 & 9 Edw. VII. ch. 9, that the
defendant, being not in custody but under bail, could have
claimed any right to a trial before a Judge without a jury.
Previously, he would have had to be in actual custody either upon
the original commitment for trial by the magistrate holding the
preliminary inquiry, or by virtue of a surrender into custody
after bail, or “otherwise in custody awaiting trial on the charge.”

The new sub-section (6) provides that a person accused
who has been bound over by a Justice under sec. 696 (i.e., to appear
for trial), and is at large under bail, may notify the Sheriff that he
desires to make his election under Part XVIII. (relating to Speedy
Trials), and thereupon the Sheriff shall notify the Judge; and,
by sub-sec. 7, the Judge having fixed the time and place for the

C. A.
1912

Rex

SOVEREEN
Magee, J.A.

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Rex

SoVEREEN
Magee, J.A.

accused to make his election, the Sheriff shall notify the accused
thereof, and the accused shall attend, and the subsequent proceed-
ings shall be as in other cases under Part XVIII.; and, by sub-sec.
8, the recognizance taken when the accused was bound over shall
be obligatory with reference to his appearance at the time and
place so fixed, and to the trial and proceedings thereupon, as if
originally entered into with reference thereto.

No time is specified for the giving of the notice to the Sheriff.
If a notice were given in such a case, it would be material to
consider at what time an election may be made by those in custody.
The original Act providing for trials by a Judge without a jury,
32 & 33 Viet. (1869) ch. 35, was intituled “An Act for the more
speedy trial in certain cases of persons charged,” etc. — after-
wards called the Speedy Trials Act — and this might give some
colour to the idea that where the trial would not be speeded the
Act was not intended to apply. But, excepting in the title, there
was nothing in the wording of the Act itself so to indicate, except
possibly the provisions that the prisoner might with his own
consent be tried “out of Sessions,” and that the Judge was to
tell him that he had the option to “remain untried until the next
sittings” of the Court of General Sessions of Oyer and Terminer.
These words did not, in fact, I think, imply that the speedy trial
must be before the session of the jury Court began — but subset
quent amendments removed any possibility of such a construction.
It must, I think, be taken that the object of speedy trials indicated
by the title was to be attained by the creation of a new tribunal —
a Court of record— which would not be limited to half-yearly or
other periodical sittings, but could sit at any time, and that
tribunal being created (see Ontario statute of 1873, 36 Viet,
ch. 8, secs. 357, 358), the positive directions to the Sheriff and the
Judge as to their duties towards prisoners, in effect, gave each
prisoner to whom the Act applied an option and right of election
as to which one of the tribunals he would be tried by, or rather
the right to have an opportunity to say he chose trial by the
Judge. I do not think it would have been any answer to a claim
to exercise such right to say to the prisoner, “The jury Court is
now sitting, and your trial there can take place to-day, or sooner
than if you are to be tried by the Judge alone.” It is now expressly
declared in sec. 825 that the trial by the Judge shall be had whether

XXVI.] ONTARIO LAW REPORTS.

the jury Court or the grand jury thereof is or is not then in session — -
and I agree with the opinion of Howell, C.J.A., in Rex v. Thomp-
son, 17 Man. L.R. 608, that this provision is not restricted to the
trial itself.

Then, by sec. 828, even after a prisoner has elected to
be tried by a jury, he may notify the Sheriff that he desires
to re-elect, and this at any time before his trial has commenced,
and whether an indictment has been preferred against him or
not — unless the Judge is of opinion that it would not be in the
interest of justice to allow a second election; and, if an indictment
has been actually preferred, the consent of the prosecuting officer
must be obtained.

In cases where, under Part XYI. or XVII., the prisoner had
elected before the committing magistrate not to be tried by him,
but by a jury, he may, under sec. 830, notify the Sheriff, before
the sitting of the jury Court, that he desires to re-elect.

The Code, therefore, gives three periods for the election by an
actual prisoner as of right — before the sitting, before the prefer-
ment of the bill, and before the trial has commenced. It would be
difficult to say which of these should apply to the case of an
accused person who is at large under bail; but I think it is clear
that his notification to the Sheriff must be taken as the foundation
of his right to put himself in the position of a prisoner as one
entitled to be called upon to elect. That he was not in actual
custody merely by reason of appearing, “as provided by his
recognizance,” is manifest from sec. 1092, which declares that a
recognizance is not discharged by arraignment or conviction.

This defendant did not give any such notice, so far as appears;
but, at the last moment, when called upon to answer to the in-
dictment, said that he desired to elect. Without being in custody
and without having given the notice to the Sheriff, he had not
put himself in th@ position to claim that right. It appears that
the Chairman of the Court of General Sessions held “that he was
not entitled under the circumstances” so to elect. Therein the
Chairman was right, as no notification had been given.

The defendant then pleaded to the indictment, or a plea must
have been entered for him, as the trial proceeded, and he was by
the jury found “guilty.” There is nothing to indicate that any
other result might have been arrived at if the Chairman had been

C. A.
1912

Rex

SOVEREEN
Magee, J.A.

ONTARIO LAW REPORTS. [vol.

C. A.
1912

trying the case without a jury, and there is no reason to suppose
that there was any failure of justice through the defendant’s

Rex

SOYEKEEN

omission.

I would answer the first question in the affirmative, the second

Magee, J.A.

and third in the negative.

Garrow, J.A., and Latchford, J., concurred.

Conviction affirmed.

XXVI.]

ONTARIO LAW REPORTS.

[IN THE COURT OF APPEAL.]

Re Village of Brussels and McKillop Municipal
Telephone System.

Re Village of Blyth and Township of McKillop.

Ontario Railway and Municipal Board — Jurisdiction — Separate Telephone
Systems in Adjacent Territories — Order for Connection and Inter-
communication and Construction and Operation of Switch-board and
Trunk Line — Ontario Telephone Act, 1910 — Agreement with Bell Tele-
phone Company Approved by Board — Applications to Board — Parties —
Township Corporation — “Municipal Telephone System ” — Power of one
Member of Board to Make Order.

The Corporation of the Village of Brussels applied to the Ontario Railway
and Municipal Board for an order compelling “The McKillop Municipal
Telephone 'System” to establish connection, intercommunication, joint
operation, reciprocal use, and transmission of business between the ap-
plicants’ and the respondents’ telephone systems; and the Board made
an order accordingly, and by a subsequent order refused to rescind it; from
which orders the township corporation, representing the subscribers to
the township telephone system, appealed. The first order required the
appellants to build and operate a switch-board and a trunk telephone
line. It appeared that the appellants were operating under an agree-
ment made between them and the Bell Telephone Company, substantially
for the purposes recognised and authorised by sec. 8 of the Ontario
Telephone Act, 1910, which agreement had been approved by the Board
prior to the application made by the village corporation: —

Held, that the result of obedience to the order appealed against would be
to alter or vary the relations based upon the agreement with the Bell
Telephone Company approved by the Board; and the Board had no
jurisdiction to do that, unless upon an application for the purpose with
proper parties before it.

Held, also, that the order made (involving a large expenditure) was not,
even apart from the agreement with the Bell Telephone Company, auth-
orised by any of the provisions of the Act; Maclaren, J.A., expressing
no opinion as to this; and Magee, J.A., inclining to the contrary opinion.
Per Moss, C.J.O., and Meredith, J.A. : — The application should have been
made against the township corporation, not against the “system,”
which was not a legal entity.

Per Meredith, J.A. : — There was no power in one member of the Board to
hear the application and make the order; and the Bell Telephone Com-
pany should have been given an opportunity to be heard upon the appli-
cation.

Orders of the Board set aside for want of jurisdiction.

An order of similar purport made by the Board upon the application of the
Corporation of the Village of Blyth was also set aside.

Appeals in two separate matters from orders of the Ontario
Railway and Municipal Board.

The first appeal was by the McKillop Municipal Telephone
System from two orders made by the Board.

The first order was made on the 10th March, 1911, on the
application of the Municipal Corporation of the Village of Brussels,
who named as respondents “The McKillop Municipal Telephone
System,” and was as follows: —

C. A.
1912

March 6

C. A.
1912

Tillage of
Brussels
and

McKillop

Municipal

Telephone

System.

ONTARIO LAW REPORTS. [vol.

Upon the application of the said applicants, and upon hearing
what was alleged by counsel for the applicants and respondents,
and for the Bell Telephone Company of Canada, and the Board
having referred this application for consideration and report to
its expert, upon consideration of the said expert’s report: —

The Board, under and in pursuance of sec. 9 of the Ontario
Telephone Act, 1910, orders connection, intercommunication,
joint operation, reciprocal use, and transmission of business be-
tween the applicants’ and respondents’ telephone systems or lines.

The Board further orders and directs the applicants to con-
struct, build, and maintain a trunk telephone line from their
switch-board in their central office in the village of Brussels, to a
point on the gravel road half-way between the village of Brussels
and the town of Seaforth.

The Board further orders that the applicants shall bear all
the cost of building, constructing, and maintaining the said trunk
line, and of equipping and operating the switch-board in the
central office in the said village of Brussels, and shall allow the
use of the same and of all their lines to the respondents, or any of
them, on the basis of a charge of five cents for each call or con-
nection.

And it is further ordered that the respondents shall build,
install, maintain, and operate a switch-board in or adjacent to
the town of Seaforth, and construct, build, and maintain a trunk
telephone line therefrom to the above-mentioned point on the
gravel road, half-way between the town of Seaforth and the
village of Brussels, being the point up to which the said applicants
have been hereinbefore directed to construct their line as afore-
said.

And it is further ordered that the respondents shall bear and
pay all the cost of building, constructing, and maintaining the
said trunk line, and of equipping and operating the said switch-
board in a central office in or adjacent to the said town of Seaforth,
and shall allow the use of the same and of all their lines to the
applicants, or any of them, on the basis of a charge of five cents
for each call or connection.

And it is further ordered that, should any person who is not
a subscriber to either the system of the applicants or the re-
spondents, desire to avail himself of the use of the said switch-

XXVI.]

ONTARIO LAW REPORTS.

board and lines, or any of them, then that a charge of twenty
cents shall be made and collected therefor, together with messenger
service, if any, which sum or sums shall be paid in to the office
from which the call originated, and that the said charge of twenty
cents, exclusive of messenger, shall form a common fund, and be
divided monthly between the applicants and the respondents,
equally, share and share alike.,

And it is ordered that the said switch-boards and trunk line
shall be built, constructed, and equipped and the connection
between the telephone systems and lines of the applicants and
respondents shall be made and completed, all within the space
of two months from the date of this order.

And it is further ordered that the terms of this order for
connection, intercommunication, joint operation, reciprocal use,
and transmission of business between the systems of the applicants
and respondents may be superseded with the approval of this
Board by a mutual agreement in writing to be made by and
between the applicants and respondents.

The McKillop Municipal Telephone System applied to the
Board to set aside or vary the order of the 10th March, 1911;
and that application was dismissed by the Board by order made
on the 5th May, 1911. This was the second order appealed
against.

The second appeal was by the Municipal Corporation of the
Township of McKillop from an order of the Board, dated the
20th June, 1911, made on the application of the Municipal Cor-
poration of the Village of Blyth, naming the township corporation
as respondents, for an order directing connection, intercommuni-
cation, etc., between the telephone systems of the applicants and
the respondents.

The order directed, amongst other things, that the township
corporation should build, maintain, and operate a switch-board
in or adjacent to the town of Seaforth, in the county of Huron,
and should construct, build, and maintain a trunk line from the
town of Clinton on the main gravel road between that town and
the village of Blyth to a point on the road distant two and one-
half miles north of the town of Clinton, being the point up to
which the village corporation were also ordered and directed to
construct their portion of the line. The township corporation

C. A.
1912

Village of
Brussels
and

McKillop

Municipal

Telephone

System.

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Village of
Brussels
and

McKillop

Municipal

Telephone

System.

were also ordered to pay all the cost of building, constructing, and
maintaining the trunk line and of equipping a switch-board and
a central office in or adjacent to the town of Seaforth, and to allow
the use of the same and of all their lines to the village corporation
or any of their subscribers, on payment of a charge of five cents
for each call or connection.

November 21 and 22, 1911 The appeals were heard by Moss,
C.J.O., Garrow, Maclaren, Meredith, and Magee, JJ.A.

M. K. Cowan, K.C., and R. S. Hays, for the appellants. The
orders appealed from should be varied or rescinded. The appel-
lants are operating municipal telephone systems under the pro-
visions of the Local Municipal Telephone Act, 8 Edw. VII. ch. 49,
but have no switch-board of their own, their switching being
done by • the Bell Telephone Company, under an agreement
approved by the Ontario Railway and Municipal Board, in
accordance with the provisions of sec. 10 of the Ontario Telephone
Act, 1910. By the terms and conditions of the orders appealed
from, the appellants’ systems will be required to terminate their
agreements and connections with the Bell Telephone Company,
and so lose the rights and benefits they now enjoy, as well as
being saddled with great additional expense. We submit that,
under sec. 6 of 6 Edw. VII. ch. 31, the hearing of this case on the
24th February, 1911, in the presence of only one member of the
Board, was irregular and illegal, and that the Board had no
power or authority to make any order based upon such a hearing.
The facts adduced do not disclose the necessity of an order as
asked for by the respondents. The provisions of sec. 9 of the
Act of 1910 are not intended to be imperative, requiring the
Board to make an order in every case applied for. If the phrase-
ology of that section appears to be imperative, its spirit is dis-
cretionary. Such discretion is a judicial and not an arbitrary
one. We further submit that the Board has no jurisdiction
whatever to make or to enforce the carrying out of the orders
appealed from; and, moreover, the appellants have no power or
authority to raise further moneys for the purpose of reconstructing
the systems in compliance with the orders of the Board. The
appellants’ systems are not complete systems, having each one
central switch-board and main trunk lines running therefrom,
within the meaning of secs. 8 and 9 of the Act of 1910.

XXVI.]

ONTARIO LAW REPORTS.

H. D. Gamble, K.C., for the respondents the Corporation of
the Village of Blyth. The orders appealed from are right, and
should be affirmed. They do not interfere with any agreement
between the Bell Telephone Company and the appellants. See
the Ontario Railway and Municipal Board Act, 1906, sec. 17,
sub-secs. 2 and 3. Moreover, the appellants do not of necessity
lose connection with adjacent townships, and they may agree to
connect their system with that of such townships, under sec. 8 of
the Act of 1910, or, in case of refusal, connection may be ordered
by the Board under sec. 9 of the same Act. The language of the
Act of 1910, sec. 9, is imperative; and the Railway Board has no
option in the matter of ordering connection; but the terms and
conditions upon which such connection is brought about are in
the sole discretion of the Board. Nothing turns upon the fact
that the agreement between the Bell Telephone Company and the
appellants was ratified by the Board, when it is observed that,
by the order ratifying, the Board reserves the right to rescind or
vary it in any way they may desire. The question of expense of
building and maintaining the necessary switch-board and other
appliances for connection between the appellants’ and respondents’
systems, be the expense much or little, does not give any right to
appeal. This, expense is only a question of fact, part of the terms
and conditions imposed upon the appellants, and the Board’s
decision upon all matters of fact is final and conclusive. See
sec. 41, sub-sec. 3, of the Ontario Railway and Municipal Board
Act, 1906. As to the proceedings before the Board on the 24th
February, 1910, we submit that the appellants have no cause of
complaint, because, after the order had been made, a rehearing
of the application was granted them, whereat the whole evidence
was gone over, and every opportunity was given the appellants
to present their case fully. As to the objection that there is no
authority in the statute by which the expense of installing the
necessary equipment may be provided for in order to comply
with the order of the Board, we submit that under sec. 11, sub-
sec. lb, and sec. 13, sub-sec. 6, of the Act of 1908, the appellants
may pass the necessary supplementary by-law and levy the cost
upon the subscribers ; but, if these sections do not confer the right,
then the order of the Board carries with it the necessary authority
to raise the money, and the Board may, under sec. 20 of the

C. A.
1912

Village of
Brussels
and

McKillop

Municipal

Telephone

System.

3 — XXVI. O.L.R.

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Village of
Brussels
and

McKillop

Municipal

Telephone

System.

Ontario Railway and Municipal Board Act, 1906, build the
appellants’ portion of the line, construct and establish the neces-
sary switch-boards to complete the connection, and assess the
amount against the appellants; and, what the Board may do
for the appellants, they may do themselves.

W. M. Sinclair , for the respondents the Corporation of the
Village of Brussels. The arguments advanced on behalf of Blyth
apply with equal force to the Brussels case. As to the jurisdiction
of the Board, see sec. 30 of the Ontario Railway and Municipal
Board Act, 1906, and sub-sec. 3 of sec. 11 of the Local Municipal
Telephone Act, 1908. Section 43 of the Ontario Railway and
Municipal Board Act, 1906, does not allow appeals on questions
of fact; and, therefore, the appellants have no right to be here.

Hays, in reply.

March 6, 1912. Moss, C.J.O. : — These are appeals from orders
or decisions pronounced by the Ontario Railway and Municipal
Board. So far as the respondents to the appeals are concerned,
the matters are separate and distinct; but substantially the same
questions are involved; and the appeals, which were heard during
the same sittings of the Court, may be conveniently dealt with
together.

The first two in point of time of the orders complained of were
pronounced upon an application made by the Corporation of
Brussels, on which they named as respondents “The McKillop
Municipal Telephone System.” This was not a proper proceed-
ing. While it seems that there is an association of individual
subscribers who for convenience act under that name, it does not
appear that there is any corporate body or company known to
the law capable of responding by that name to the application
made by Brussels to the Board for the orders now in question.
Having been constructed and installed in 1908, under the pro-
visions of the Local Municipal Telephone Act, 1908, the system
and all works and property acquired, erected, or used in connec-
tion therewith, became vested in the Municipality of McKillop
in trust for the benefit of the subscribers. The opposition to the
application was made through the municipality; but it may be
questioned whether, in the form in which the proceedings now
stand, the orders made could be effectively enforced, if capable
of enforcement under any circumstances.

XXVI.]

ONTARIO LAW REPORTS.

But more formidable objections appear when the substantial
questions between the parties are examined.

The respondents the Corporation of the Village of Brussels,
as trustees for the subscribers of the local telephone system
known as the Brussels Morris and Grey Telephone System, made
application in October, 1910, to the Ontario Railway and Muni-
cipal Board for an order for connection, intercommunication, or
reciprocal use in the transmission of business between the tele-
phone systems of the respondents and the appellants. The
applicants alleged that their system was located in the territory
immediately adjacent to the appellants’; and that they had been,
for some months previous to their application, desirous of entering
into an agreement with the appellants for such connection, inter-
communication, or reciprocal use; but the latter had declined to
do so. Apparently, the application was based upon sec. 9* of the
Ontario Telephone Act, 1910 — 10 Edw. VII. ch. 84 — which seems
to be the only enactment that affords any warrant for the applica-
tion.

C. A.
1912

Village of
Brussels

AND

MoKillop

Municipal

Telephone

System.

Moss, C.J.O.

It is very difficult, however, to give any intelligible meaning
to the language of the section. Read literally, it does not compre-
hend this case; on the contrary, it would seem to be providing
for some case of a company or person, as defined by sec. 2 (c)f of
the Act, having two or more systems or lines “ located in
territory adjacent to each other.” Doubtless, this was not the
intention; but, in the present form of the section, the real intention
is not clearly expressed. The order of the Board dated the 10th
March, 1911, which directs connection, intercommunication,
joint operation, reciprocal use, and transmission of business, pur-
ports to be made in pursuance of sec. 9; but, as pointed out above,

*9. Wherever the telephone systems or lines of any company or person
are located in territory adjacent to each other and in the event of any
company or person owning, controlling, or operating one or more of the said
telephone systems, refusing or neglecting to enter into an agreement for
any or all of the purposes mentioned in the next preceding section, the Board
shall issue an order providing for such connection, intercommunication,
joint occupation, reciprocal use, or transmission of business upon such terms
and conditions as it may deem advisable.

f 2. (c) “Company or Person” shall mean any Company, Corporation,

Municipal Corporation, Association, individual or aggregation of individuals
owning, controlling, or operating a telephone system or lines within the
Province of Ontario, and not within the legislative authority of the Parlia-
ment of Canada.

C. A.
1912

Village of
Brussels
and

MoKillop

Municipal

Telephone

System.

Moss, C.J.O.

ONTARIO LAW REPORTS. [vol.

that section is halting and uncertain in expression; and, in strict-
ness, it does not confer jurisdiction in this particular case.

There still remains the question of jurisdiction dependent
upon the existence of an agreement between the appellants and
the Bell Telephone Company, substantially for the purposes
recognised and authorised by sec. 8* of the Ontario Telephone
Act, 1910, and which had been approved of by the Board prior
to the application by Brussels.

The appellants and the Bell Telephone Company were working
under this agreement when the orders now in question were made
by the Board. It is said that there was no intention to interfere
with that agreement, and that there is in fact no interference
with it.

But it is obvious that compliance with the order by the appel-
lants does seriously alter their relations with the Bell Telephone
Company. It exposes them to the consequences of a breach of
the agreement, and may deprive them of the benefits and advan-
tages which they now enjoy under it. And, while the agreement
remains as an existing agreement sanctioned and approved by
the Board, the Bell Telephone Company are entitled to assert
their rights under it and to claim that they should remain undis-
turbed and unaffected as long as the agreement stands. The
Board has undoubted power to rescind the order for good cause,
but the jurisdiction to do so should be exercised only upon a
properly framed application for that purpose, to which all those
who are interested are parties or of which they are properly
notified.

At present, the agreement is a valid subsisting agreement;
and, while, upon an application regularly framed and constituted
as to parties, the Board may determine its true meaning, yet
while it stands the Board is without power or jurisdiction to
alter or vary it.

* 8. Subject to the approval of the Board every company or person shall
have power to enter into any agreement or agreements with any other
company or person for the purpose of providing for connection, intercom-
munication, joint operation, reciprocal use, or transmission of business as
between the respective systems controlled, owned or operated by such
companies or persons, and may make such arrangements as shall be deemed
advisable for the proper apportionment of expenditures and commissions,
the division of receipts and profits, or such other adjustments as may be
necessary under any such agreement.

XXVI.]

ONTARIO LAW REPORTS.

And the important question is, whether the Board has, in
the present state of the legislation, any power or jurisdiction to
order the performance of work of construction and connection
with the Brussels system, involving the expenditure of money
upon capital account by the subscribers to the appellants’ system.
There are no express provisions covering such a case; and the
different sections to which we were referred by counsel for the re-
spondents fall far short of supplying the necessary machinery
for imposing or collecting funds to meet the outlay which obedience
to the orders imposes.

Apart from these latter considerations, however, the want of
jurisdiction to deal with the application made on behalf of Brussels,
based upon the other grounds referred to, is sufficient reason for
allowing the appeal.

There is no difference in substance between the case of Brussels
and the case of the application by the Corporation of the Village
of Blyth. Except as to the form of the application with respect
to the parties respondent, all the objections to the power and
jurisdiction of the Board apply with the same force as in the
Brussels case. The order complained of in the Blyth case is to
the same effect as that pronounced in the Brussels case. The
appeal is on the same grounds, and the result should be the same.

Both appeals should be allowed, and the orders complained
of be set aside with costs to the appellants in each case.

C. A.
1912

Village of
Brussels
and

MoKillop

Municipal

Telephone

System.

Moss, C.J.O.

Garrow, J.A., concurred.

Maclaren, J.A. (Brussels case): — This is an appeal by the
Corporation of the Township of McKillop, representing the
subscribers to the municipal telephone system of the township,
on leave granted by the Court, from an order of the Ontario
Railway and Municipal Board of the 10th March, 1911, ordering
the appellants to build and operate a switch-board in or adjacent
to the town of Seaforth and a trunk telephone line therefrom to a
point half-way between Seaforth and Brussels, there to connect
with the Brussels line to that village; and from an order of the
said Board of the 5th May, 1911, refusing to vary or rescind the
order of the 10th March.

The appellants were organised under sec. 11 of the Local
Municipal Telephone Act, 1908, 8 Edw. VII. ch. 49, but have no

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Village of
Brussels

AND

MoKillop

Municipal

Telephone

System.

Maclaren, J.A.

switch-board of their own, their switching being done by the
Bell Telephone Company, in Seaforth, under an agreement which
was duly approved by the said Board in accordance with the pro-
visions of sec. 10 of the Ontario Telephone Act, 1910, 10 Edw.
VII. ch. 84. Section 11 of this Act provides that no company or
person owning such a telephone system or lines shall enter into
any contract, agreement, or arrangement with any other com-
pany having authority to construct or operate a telephone system
or line, restricting competition in the supply of such service,
unless the same is just and reasonable, and until such contract,
agreement, or arrangement has been submitted to and received
the assent of the Board.

The said agreement contained a provision that during its
continuance the appellants should not connect their telephone
system with the system of any company or persons operating in
competition with the Bell Telephone Company, and without the
consent of the Bell Telephone Company; and it appeared that the
applicants in this matter operated in opposition to the Bell Tele-
phone Company, and that the latter refused the appellants the
right to connect their system with that of the applicants.

The applicants relied upon a clause in the approval of the
Board, to the effect that the right of revoking or varying the order
was reserved; but, in my opinion, such reservation does not confer
any greater power upon the Board than is found in the Ontario
Railway and Municipal Board Act, 1906, 6 Edw. VII. ch. 31, sec.
19 (4), which says that “The Board may review, rescind, change,
alter or vary any rule, regulation, order or decision made by it.”

By sec. 14 of the Ontario Telephone Act, 1910, it is expressly
enacted that the Board shall not have the power “to alter or
vary any agreement between a municipal corporation and a
company, or between two or more companies or persons.” What
they cannot do directly, I do not think they can do indirectly or
by a side wind, as is attempted by the orders now appealed from.

The agreement between the McKillop telephone subscribers,
which must have been found by the Board to have been just
and reasonable when they gave it their approval, should stand
until, after proper notice to the parties, they have an opportunity
of stating their objections to the variance or revocation of such
approval. So long as such approval stands unchanged and unre-

XXVI.]

ONTARIO LAW REPORTS.

yoked, I am of opinion that the Board is without jurisdiction to
pass such orders as are now in appeal.

I do not consider it necessary at present to consider the other
matters argued before us, or to express any opinion as to whether
or not the orders in question would be a compliance with the pro-
visions of sec. 9 of the Ontario Telephone Act, 1910, even if the
above objection did not exist.

In my opinion, the appeal should be allowed.

(Blyth case.) The same objection applies to the order of
the Ontario Railway and Municipal Board in this case as in the
Brussels case; and, for the reasons given therein, I am of opinion
that the appeal should b^ allowed and the orders set aside.

C. A.
1912

Village of
Brussels

AND

MoKillop

Municipal

Telephone

System.

Maclaren, J.A.

Meredith, J.A. (Brussels case) The appellants have a
local telephone system which satisfies all their needs; and they
are naturally opposed to any action which would disturb that
system or the very satisfactory arrangements made between
them and the Bell Telephone Company, under which the appel-
lants’ lines are operated by the company and under which the
subscribers to the appellants’ system are also given intercommun-
ication with the company’s subscribers ; and under which arrange-
ments the appellants are bound not to make connection with any
other system.

Upon an application made by the respondents to the Ontario
Railway and Municipal Board, which was heard by one member
of the Board only, an order was made requiring the appellants to
connect their system with that of the respondents, and to give
intercommunication between the subscribers of each, and, for
that purpose, to build and operate a trunk line and a switch-
board — which would, of course, necessitate providing also a
room, light, and heat sufficient for the purpose. The order, if
obeyed, would compel the appellants to break their agreement
with the Bell Telephone Company and put an end to all their
rights and benefits under it, obliging them to operate their own
lines at very considerable continued expense, in addition to the
very considerable expense of doing the work ordered to be done
by them; entirely reversing their policy in the operation of their
lines and making the operation much more costly, as well as
depriving them of the benefits of intercommunication with the
Bell Telephone Company’s subscribers; unless, indeed, that

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Village of
Brussels
and

McKillop

Municipal

Telephone

System.

Meredith, J.A.

company should see fit to make some other agreement with
them, which neither they nor the Board would gave any power
to compel.

If the Board had the power to do this injustice, the appel-
lants must submit to it, as well as must the Bell Telephone Com-
pany, for in that case there would be no right of appeal; but, if
the Board had no such power, this Court can and must relieve
the appellants from it: and the power to make such an order
ought to be made to appear with very reasonable clearness to be
upheld in this Court; but I am unable to find, in all the legislation
upon the subject, sufficient authority to support it.

The first question that strikes the mind, in dealing with the
case, is: where is the money to come from which must be ex-
pended in obeying the order? And it must be borne in mind
that, if the power exist, there is no limit of the amount which the
Board may thus require to be expended; it may be little in one
case, but it may be very great in another, and that quite apart
from any damages any one might be compelled to pay for breach
of contract such as that involved in this case. I have been unable
to find any source from which the money which must be paid
out, if the order in appeal is complied with, is to come; and I
cannot help thinking that, if the subscribers to such systems
could be so made personally liable, they might go a long time with-
out the advantages of a telephone rather than run the risk of being
burdened with the cost of doing that which is altogether against
their wishes, and that which they believe to be their best interests,
upsetting their whole plan of operation, compelling a breach of
their contract, with whatever consequences might follow from it,
as well as requiring them to do that which they have carefully
provided against — operate their own system. The cost of con-
structing and maintaining a system is to be paid by the “ init-
iating municipality/’ and may be recovered from the subscribers
in the manner provided for in the enactments; but such “cost”
must, I think, under the words of the enactment, as well as the
reasonableness of the thing, be limited to the construction and
maintenance of the system as contemplated and desired by the
subscribers, and which they have petitioned the municipality
to undertake for them, and riot a different system which they do

XXVI.]

ONTARIO LAW REPORTS.

not desire, but which some other system endeavours to force
upon them; and, of course, there is no warrant for compelling the
municipality to pay without recoupment.

It may very well be that the Board would have power to
order connection and intercommunication where the applicants
were willing to pay the cost of making the connection and where
it could be done without inflicting upon any party such injustice
as the appellants reasonably complain of in this case. I can
find no sufficient authority for an order which has the effect of
the order made in this case; nor is there any need for it.

There is no good reason why the respondents should not make
arrangements with the Bell Telephone Company similar to those
made by the appellants with that company, arrangements
which evidently could be made at much less cost and which would
not only give the respondents all they sought in this application,
but also intercommunication with the company’s subscribers as
well; but that they would not, because, I have no doubt, of some
feeling against, and concerted opposition to, that company,
to give effect to which the appellants are to be driven from their
alliance with it, and compelled, at great cost, to establish switching
stations and operate their own lines, as well as to lose the benefit
of intercommunication over the Bell system, and take the conse-
quences of a breach of the agreement with the company.

For two other reasons, I am also of opinion that the order
cannot stand: (1) there was no power in one member of the Board
to hear the application and make the order; and (2) the applica-
tion should have been made against the municipality, not against
the “system, ” which is not a legal entity: and there is still another
reason, which I shall mention in dealing with the like case of
Blyth and McKillop.

The order should, I think, be rescinded for want of juris-
diction.

(Blyth case.) This case is quite the same as the Brussels
case, in which I have just expressed my opinion, except in these
respects: (1) the initiating municipality is properly proceeded
against; and (2) the application was heard, and the order made,
by the full Board: and, therefore, all that I have said in the other
case, except in these respects, applies fully to this case: but I

C.A.

1912

Village of
Brussels
and

MoKillop

Municipal

Telephone

System.

Meredith, J.A.

ONTARIO LAW REPORTS. [vol.

G. A.
1912

Village of
Brussels

AND

McKillop

Municipal

Telephone

System.

Meredith, J.A.

desire to add a few observations now, applicable alike to each
case.

The Bell Telephone Company are materially affected by the
order; and, according to first principles in the administration of
justice, ought to have been given an opportunity of being heard
upon the application: they might have desired to oppose it upon
the merits, if the Board had jurisdiction: and they might also
have desired to contend, and possibly might have been able to
convince the Board, that the order sought would be one
substantially affecting rights in them, over which, not being a
provincial corporation, the Board had no power: see sec. 2 (c)
of the Ontario Telephone Act, 1910.

This appeal should, therefore, be dealt with in the same
manner as the other.

Magee, J.A.: — Looking at the provision for extensions in
secs. 5, 7, and 11 of the Local Municipal Telephone Act, 1908,
and the provisions for connection and switch-boards in secs. 10
and 11, and the amendments in 1910 and 1911 by 10 Edw. VII.
ch. 92, secs. 1 and 4, and 1 Geo. V. ch. 56, sec. 2 (13 a., (5), (6)),
I am inclined to think the council would be entitled to collect
from the subscribers the additional cost imposed upon it by
law. It would appear to be one of the risks run by those who
invoke for their private convenience the authority of the muni-
cipality to use the highways for the poles and lines, and break,
dig, and trench the same, or private property, that they may be
called upon to submit to more extension and expense and a wider
connection than they originally contemplated. As the munici-
pality is, under sec. 10, authorised to enter into agreements for
connection with other systems, I would think that, under sec. 4
of the Ontario Telephone Act, 1910, the Board would have power
to order it to do so.

But, for the other reasons stated by my Lord the Chief Justice,

I agree that the appeals should be allowed.

Appeals allowed.

XXVI.]

ONTARIO LAW REPORTS.

[DIVISIONAL COURT.]

Rice v. Galbraith

Principal and Agent — Agent’s Commission on Sale of Land — Employment
of Agent to Find Purchaser — Vendor and Purchaser Brought together
\ by Intervention of Agent — Sale Effected by Vendor without Know-
ledge of Agent’s Introduction of Purchaser.

Where the defendant employed the plaintiffs, who were brokers, to sell his
property, and imposed no time-limit, and never revoked their authority
to find a purchaser., and the plaintiffs brought the property to the notice
of one who became the purchaser, though the negotiations were not
conducted by the plaintiffs, and the defendant, when lie closed the
transaction, did not know that the plaintiffs had brought the property
to the notice of the purchaser: —

Held, that the plaintiffs were entitled to a commission upon the sale-price.
Review of the authorities.

Wilkinson v. Alston (1879), 48 L.J.Q.B. 733, applied and followed.
Locators v. Clough (1908), 17 Man. L.R. 659, disapproved.

Judgment of Denton, Jun. Co. C.J., York, reversed.

Appeal by the plaintiffs from the judgment of Denton,
Jun. Co. C.J., dismissing an action in the County Court of the
County of York for commission on the sale-price of the defendant’s
land, upon a sale brought about by the efforts of the plaintiffs
as the defendant’s agents for sale, as they alleged.

February 16. The appeal was heard by a Divisional Court
composed of Clute, Latchford, and Sutherland, JJ.

G. H. Kilmer, K.C., for the plaintiffs. In the Court below
the case was decided in favour of the defendant, on the ground
that he did not know, when he sold to the purchaser, that she
was the plaintiffs’ client. Assuming the facts, which are not
open to dispute, that the defendant employed the plaintiffs to
sell the property, and that the plaintiffs brought it to the notice
of the purchaser, their right to the commission is established,
and is not affected by the fact that, when the defendant sold the
property, he did not know that the purchaser was the client of the
plaintiffs: Sager v. Sheffer (1911), 2 O.W.N. 671, and the case
there cited of Wilkinson v. Alston (1879), 48 L.J.Q.B. 733; Bur-
chell v. Gowrie and Blockhouse Collieries Limited, [1910] A.C.
614. The learned trial Judge relied on the case of Locators v.
Clough (1908), 17 Man. L.R. 659; but it is submitted that the
authorities above cited should be followed in preference to the
Manitoba case.

J. J. Maclennan, for the defendant, argued that the Manitoba
case was absolutely in point, and should be followed. The agent,

D. C.
1912

March 8.

ONTARIO LAW REPORTS. [vol.

in order to be entitled to a commission, must do more than
merely say that certain premises are for sale — he must be the
efficient cause, the causa causans, of the transaction : Burchell v.

Galbraith. Gowrie and Blockhouse Collieries Limited, supra, in which case
the agent was an active intermediary, and did more than merely
introduce the purchaser. Locators v. Clough, supra, was an
unanimous judgment of the Manitoba Court of Appeal, and
shews that the onus is on the plaintiffs to shew that but for their
intervention the sale would not have taken place. He also
referred to Stratton v. Vachon (1911), 44 S.C.R. 395, per Duff, J.,

, at p. 406, where he refers to Lord Atkinson’s judgment in the
Burchell case, at p. 624. [Sutherland, J., referred to Singer v.
Russell (1912), 25 O.L.R. 444.]

Kilmer, in reply, argued that the plaintiffs had rendered valu-
able service to the defendant in connection with the sale, and
referred particularly to the judgment of Cotton, L.J., in the
Wilkinson case, at p. 736.

March 8. Clute, J.: — The action is for a commission on
the sale of land. The defendant listed the property with the
plaintiffs, real estate brokers, in Toronto, for sale. It is clearly
established that the plaintiffs brought the property to the notice
of Mrs. Rough, who subsequently became the purchaser. The
house was examined by her at the instance of the plaintiffs. Mrs.
Rough is under the impression that her attention was first brought
to the house at the instance of her brother-in-law, Mr. Blackie;
but in this, I think, she is mistaken; and the Judge, while not
deciding the point, seemed also inclined to that view.

Subsequently, another brother-in-law of hers got in communi-
cation with one of the builders, and so with the defendant, Gal-
braith, and, acting for Mrs. Rough, finally agreed upon the
purchase-price, which was $100 less than the defendant had
instructed the plaintiffs to accept.

Upon the evidence, there can be no reasonable doubt that it
was through the action of the plaintiffs that the defendant got
in communication with the purchaser; and so I think it may be
fairly found upon the evidence that the sale would not have been
brought about but for the action of the plaintiffs. But it is
said, and the judgment below proceeds upon this sole ground,
that the sale was in fact made by the defendant without knowing

D. C.
1912

Rice

15 .

XXVI.]

ONTARIO LAW REPORTS.

at the time that the attention of the purchaser had been brought
to the premises by the plaintiffs. Upon this ground the trial
Judge found for the defendant, following Locators v. Clough ,
17 Man. L.R. 659. The judgment is by the Court of Appeal.
Phippen, J.A., by whom the judgment of the Court was given,
sa}^s: “I have no doubt that had the defendant sold with knowl-
edge that the property had been introduced to Forrest by the
plaintiffs, he would be liable for some commission. I cannot,
however, hold that the mere introduction of the property to
Forrest without endeavouring to negotiate or in fact negotiating
a sale is itself an earning of the agreed commission, the owner
effecting a sale on terms less favourable than those expressed
in the commission contract, in ignorance of the plaintiffs’ action
and under circumstances which did not place him upon inquiry.”

I do not take this to be the law. A number of the cases
bearing upon this point are referred to in Sager v. Sheffer, 2 O.W.N.
671. It has been held sufficient in most cases that the agent has
been instrumental in bringing the purchaser and vendor together,
although the negotiations are subsequently conducted exclusively
by the parties. “If the relation of buyer and seller is really
brought about by the act of the agent, he is eiititled to commission
although the actual sale has not been effected by him:” Green v.
Bartlett (1863), 14 C.B. N.S. 681, 685; Steere v. Smith (1885),
2 Times L.R. 131. “It is sufficient if the purchaser becomes
such through the agent’s intervention:” Mansell v. Clements
(1874), L.R. 9 C.P. 139. Wilkinson v. Alston, 48 L.J. Q.B. 733,
is a very strong case in the plaintiffs’ favour. This was not
referred to in the Manitoba case.

The recent case of Burchett v. Gowrie and Blockhouse Collieries
Limited, [1910] A.C. 614, was applied in Stratton V. Vachon, 44
S.C.R. 395. The last case proceeds upon the ground that the
agent had brought the owner into relation with the person who
finally became the purchaser, and was, therefore, entitled to the
customary commission.

The plaintiffs having brought the parties together and a sale
having been effected by their intervention, it is not sufficient,
in my opinion, to disentitle them to a commission to say that
the vendor had proceeded with his negotiations with the pur-

D. C.
1912

Rice

Oaxjbeaith.

Clute, J.

D. C.
1912

Rice

Gaolbraith.
Clute, J.

ONTARIO LAW REPORTS. [vol.

chaser without the knowledge that the agents had been instru-
mental in bringing the parties together.

I think this point was involved in the decision in the Wilkinson
case. After various negotiations, in that case, the sale was finally
made by the agent writing a letter to a broker reminding him that
the vessel was for sale. The broker took no notice of this letter,
and neither the plaintiff nor the defendant was aware that the
letter was written, but subsequently the broker wrote to the
defendant, and afterwards disclosed the name of the principal
for whom he was acting, and the sale was then effected. Bramwell,
L.J., put the case very broadly: “The defendant practically said
to the plaintiff, ‘If you or White can find me a purchaser, and
the purchase is completed, I will pay you a commission/ And
the expression, ‘If you can find a purchaser,’ may be explained
as meaning, if you can introduce a purchaser to myself, or can
introduce a purchaser to the premises, or call the premises to the
notice of the purchaser.”

The decision of the Commission of Appeals, New York, is
to the same effect, Lloyd v. Matthews (1872), 51 N.Y. 124. There
the objection was taken that the seller is entitled to know that the
party with whom he is dealing is a customer of the broker, if
such be the fact. In dealing with this objection, Lott, Ch.C.,
said: “The sixth proposition is not correct. It is to be understood,
in the connection in which it is presented, as declaring that,
although a party is brought, through the agency and instrumenta-
lity of the broker, into a negotiation and dealing with the owner,
which actually results in a sale, yet the broker is not entitled to
compensation, unless it is made known to the owner that the
purchaser is his customer. That is not true. It is sufficient
that the purchaser is in fact such customer.”

With respect, I think the judgment appealed from should be
set aside and judgment entered for the plaintiffs for the amount
of their commission, with costs here and below.

Latchford, J.: — That the defendant employed the plaintiffs
to sell the property is found as a fact by the learned trial Judge.
The finding is amply supported by evidence, though denied upon
oath by Mr. Galbraith. No limit as to time was imposed when
authority to find a purchaser was given, nor was that authority
ever revoked. It is satisfactorily established that the property

XXVI.]

ONTARIO LAW REPORTS.

was brought to the notice of the purchaser by the plaintiffs.
They sent her a list of houses, which included the defendant’s,
and took her to examine his house. The proceedings subsequent
to the introduction of the property to the purchaser were conducted
without further intervention by the plaintiffs; and the defend-
ant, when he closed the transaction, was not aware that the pur-
chaser had been introduced to the property by the only agents
with whom he had placed it for sale.

The contract between the defendant and the plaintiffs was
that he would pay a commission if they would find a purchaser.
To apply the words of Lord Justice Brett in Wilkinson v. Alston ,
48 L.J. Q.B. 733, they would in point of law fulfil the contract if
they introduced the property to the notice of the purchaser and
the latter purchased it in consequence of that introduction, though
all proceedings subsequent to that introduction were carried on
between the principals without any further intervention by the
agents. It would be impossible to find authority more directly
in point. The case does not appear to have been cited in Locators
v. Clough, 17 Man. L.R. 659, nor to the trial Judge in this case.
It was referred to and followed in Sager v. Sheffer, 2 O.W.N.
671, and is in principle and authority to be preferred to the
decision of the Manitoba Court. See also Stratton v. Vachon,
44 S.C.R. 395.

I think the appeal should be allowed, with costs here and
below.

D. C.
1912

Rice

Galbraith.

Latchford, J.

Sutherland, J., concurred.

Judgment accordingly ,

ONTARIO LAW REPORTS.

D. C.
1912

March 8

[VOL..

[DIVISIONAL COURT.]

Rich v. Melancthon Board of Health.

Public Health Act — Services of Physician Employed by Loca:l Board of

Health — Remuneration — Action for — Mandatory Order — Liability —

Proper Remedy — Prerogative Writ of Mandamus — Order under Con.

Rule 1091 — Jurisdiction of County Court — Reasons for Judgment —

Costs.

The members of a Local Board of Health are not, under the Public Health
Act, R.S.O. 1897, ch. 248, constituted a corporation; and the Board as
a whole is not personally liable nor are the members individually
liable to be sued for the recovery of a medical claim as a private debt.
The remedy is to be sought against the Board as a public body, by seek-
ing the grant of a writ of mandamus requiring the Board to issue an
order upon the municipality for the amount of the claim.

Bibby v. Davis (1902), 1 O.W.R. 189, not followed.

Sellars v. Village of Dutton (1904), 7 O.L.R. 646, and Ross v. Township
of London (1910-11), 20 O.L.R. 578, 23 O.L.R. 74, followed.

The writ is the prerogative writ of mandamus ; and the order substituted
therefor may now be issued by any of the Divisions of the High Court,
but not by an inferior Court, and is issued upon summary application:
Con. Rule 1091.

The mandamus which may be awarded in an action is either in the nature
of the old equitable mandatory injunction, or is merely ancillary to the
enforcement of a legal right for which an action may be maintained at
law.

Judgment of the County Court of Dufferin affirmed, with a variation as
to costs.

Per Boyd, C.: — Reasons for the judgment below should have been given.

An appeal by the plaintiff from the judgment of the Judge of
the County Court of the County of Dufferin, dismissing an action
brought in that Court by a physician to recover $30 for services
performed under the direction of the Board of Health of the
Township of Melancthon. The plaintiff sought a personal
judgment and a mandatory order to enforce it.

March 5. The appeal was heard by a Divisional Court com-
posed of Boyd, C., Latchford and Middleton, JJ.

W. H. Harris, for the plaintiff, argued that the Board of
Health had been properly sued, and cited Bibby v. Davis (1902) r
1 O.W.R. 189, and Ross v. Township of London (1910-11), 20
O.L.R. 578, 23 O.L.R. 74. The plaintiff was the duly appointed
medical health officer of the Board. He did work on the direction
of the Board, and should be paid therefor: Public Health Act,
R.S.O. 1897, ch. 248, sec. 122.

W. C. Chisholm, K.C., for the defendants, contended that
the plaintiff was not properly authorised by the Board of Health.
The plaintiff should have notified the Board before undertaking

XXVI.]

ONTARIO LAW REPORTS.

to do the work himself. Then the Board could have compelled
the people whose house was cleaned to pay for the disinfection
thereof. Besides, the plaintiff’s remedy, if any, was by appli-
cation for mandamus, and not by action. He referred to Ross
v. Township of London, supra, and the cases there cited.

Harris, in reply.

March 8. Boyd, C.: — This is an unfortunate bit of litigation
for the plaintiff. He is entitled to be paid $30 for his medical
services, rendered at the instance of the Board of Health, but
cannot recover it by this method. The miscarriage is not to be
wondered at, considering the state of the cases and the vague
and rather embarrassing clauses of the Public Health Act —
which invite, and are, I understand, about to receive clarifying
amendments: R.S.O. 1897, ch. 248.

It is now pretty well settled that the members of the Board
are not constituted a corporation, though they have been judi-
cially spoken of as a quasi-corporation; and it is also settled that
the Board as a whole is not personally liable nor are the component
members thereof individually liable to be sued for the recovery
of medical claims as for a private debt. The remedy is to be
sought against the Board as a public body, if payment cannot
be otherwise obtained — by seeking the grant of a writ of mandamus
requiring the Board to issue an order upon the municipality for
the amount of the claim, in order that payment may be made
out of the funds applicable thereto.

The writ is the high prerogative writ, so-called, available in
cases where there is no right of action for the recovery of the
claim, and relief is to be sought against a public body who fail
to perform statutory or other public duties imposed upon that
body, for the benefit of the applicant. This plaintiff by his
pleading seeks a personal judgment for the amount, and also
asks for a mandatory order to enforce it, and for that purpose
sues the public body under the name of the Board of Health for
the Township. The personal judgment he cannot get, and for
this reason he cannot in and by an action get a mandatory order.
Nor could he, in any circumstances, get the mandatory order of the
character required from an inferior Court, such as the County
Court. The prerogative writ of mandamus, which is the appropriate

4 — XXVI. O.L.R.

D. C.
1912

Rich

Melanc-

THON

Board of
Health.

Boyd, C.

ONTARIO LAW REPORTS.

[VOL.

D. C.
1912

Rich

Melanc-
thon
Boabd of
Health.

Boyd, C.

method of relief, can be issued only by the High Court. Orig-
inally confined to the King’s Bench alone, it may now be issued
by any of the Divisions of the High Court, as was explained in
the case reported in 19 P.R. 329, 332, Toronto Public Library
Board v. City of Toronto (1900).

The case of Bibby v. Davis, 1 O.W.R. 189, which may have
misled the plaintiff, is not now to be followed in the light of later
decisions: Sellars v. Village of Dutton (1904), 7 O.L.R. 646; Ross
v. Township of London, 20 O.L.R. 578, affirmed in appeal, 23
O.L.R. 74. See* also, as to the writ, City of Kingston v. Kingston,
etc., Electric R.W. Co. (1897), 28 O.R. 399, and in appeal (1898),
25 A.R. 462.

There is an inherent lack of jurisdiction in the County Court
to deal with this claim; but the matter was not contested on the
line above indicated on the appeal before us. We are all in the
dark as to what took place on the trial below; the only judgment
given being that the action is dismissed with costs. This curt
disposal of appealable cases has often been commented upon as
unfair to the suitors and to the Court of Appeal. When reasons
are given for the judgment, it enables the dissatisfied litigant to
judge whether to appeal or not, and these reasons are a
material assistance to the appellate Court. In brief, when
reasons for the judgment exist, they should be given; when they
are not given, it may be that the rule “de non apparentibus
etc., will excuse.

The defendants raised an issue disputing the claim which was
vexatious and did not take the vital point on which we decide;
so that, while the appeal is disallowed, we think the proper order
to make is to dismiss both action and appeal without costs.

This is to be without prejudice to the plaintiff prosecuting
his claim as he shall be advised — if the municipality does not
provide means for payment.

Latchford, J.: — I agree.

Middleton, J.: — I agree with my Lord the Chancellor, and
only desire to add to what he has said, for the purpose of ex-
plaining more at length the reason why I think that an action
for a mandamus or a mandatory order is not the proper or permis-

XXVI.]

ONTARIO LAW REPORTS.

sible remedy. Some confusion has arisen from a failure to keep
in mind the historical origin of the present jurisdiction of the High
Court, and by reason of the term “mandamus” being used to
indicate several distinct things.

The Court of Chancery always had jurisdiction to enforce
certain rights by means of a mandatory injunction, as well as by
specific performance. Prior to the Common Law Procedure
Act, the Courts of Law had no such power.

The Court of King’s Bench, as one of the Crown prerogatives,
had the right to issue the prerogative writ of mandamus. The
scope of this writ was very widely different from the mandatory
order in Equity.

The Common Law Commissioners of 1834 reported in favour
of an amendment by which the Courts of Law should be given the
same jurisdiction as the Court of Equity to restrain the violation
of legal rights, in cases in which an injunction might issue for
that purpose from Courts of Equity. Following this, the Common
Law Procedure Act of 1854 provided that a plaintiff at law
might claim a writ of mandamus “commanding the defendant
to fulfil any duty in the fulfilment of which the plaintiff is person-
ally interested.” This writ was to have the same force and effect
as the peremptory writ issued out of the Queen’s Bench. This
statute was subsequently enacted here, and in its present form is
found as Con. Rules 1081-1083.

One of the cardinal principles governing the issue of the
prerogative writ was, that it would never be granted where the
applicant had some other remedy open to him. After the passing
of the Common Law Procedure Act, it was suggested that ^the
power conferred upon that Court to award a mandamus in an
action practically superseded and rendered obsolete the peremptory
writ. In The Queen v. Lambourn Valley R.W. Co. (1888), 22
Q.B.D. 463, it was said by Pollock, B., that “since the passing
of this Act it cannot be said that the plaintiff has no specific
remedy to enforce the right which he says has been denied to him;”
and by Manisty, J. : “In 1854, a remedy which did not exist before
was given by the Legislature, viz., an action of mandamus,
which is in fact for a decree ordering the performance of the duty
which the Court thinks ought to be done, and is a more convenient
proceeding than by the prerogative writ.”

D. C.
1912

Rice

Melanc-

THON

Board of
Health.

Middleton, J.

ONTARIO LAW REPORTS.

[VOL.

D. C.
1912

Rich

Melanc-

THON
Board of
Health.

Middleton, J.

This view of the effect of the statute has not been generally
accepted; and in Smith v. Chorley District Council, [1897] 1 Q.B.
532, Kennedy, J., collects the subsequent decisions in which
it has been commented upon, and adopts as a more accurate
statement of the law that found in Baxter v. London County Council
(1890), 63 L.T.R. 767, at p; 771, where Day, J., says: “The true
and only remedy which the plaintiff has for the purpose of en-
forcing the rights which I am of opinion he has got, is by a pre-
rogative writ of mandamus. When I objected that this was a
matter for mandamus, I was answered that this was an action
for a mandamus. It is an action for a mandamus based upon the
Common Law Procedure Act, 1854, and the action for a mandamus
is simply an attempt to engraft upon the old common law remedy
a right in the nature of specific performance. When private
persons had rights one against the other, the Court had power to
grant a mandamus or direct specific performance, or something
in the nature of an injunction, to command that the right claimed
by the one party should be acceded to by the other. But it was
never contemplated that the action for a mandamus was to super-
sede the prerogative writ of mandamus. In this case no action
will lie. I am perfectly clear that this is not an action which will
lie between the parties, or a case in which a statutable mandamus
will be applicable, because no action would lie, and a mandamus
is only granted as ancillary to the action, and for the purpose of
enforcing the private right in respect of which the private liti-
gation had arisen. It was never contemplated that a private
mandamus should be granted in cases in which a prerogative
mandamus had,, from time whereof memory does not run to
the contrary, been alone the effective remedy.”

This is quite in accordance with the view taken in other cases
by other Judges. In Glossop v. Heston and Isleworth Local Board
(1879), 12 Ch.D. 102, at p. 122, Brett, L.J., speaking of the man-
damus referred to in the section of the Judicature Act corres-
ponding with the Ontario Judicature Act, R.S.O. 1897, ch. 51,
sec. 58, sub-sec. 9 — which provides that “a mandamus or an
injunction may be granted ... in all cases in which it shall
appear to the Court to be just and convenient” — says that the
case before him “is not brought within the rule that would enable
the Court of Chancery to grant a mandatory injunction. It is

XXVI.]

ONTARIO LAW REPORTS.

said that, nevertheless, the defendants are liable to a mandamus
to do their duty. Now, supposing they had neglected or refused
to do their duty, then I think they would have been liable to a
mandamus, but not to a mandamus to be granted by the Chancery
Division. It would have been a prerogative mandamus, as it
is called, to them as a public body to enter upon and do their
duty. That, as it seems to me, under the Judicature Act as it
was before, is a remedy that can be granted only in the Court of
Queen's Bench. I think the mandamus spoken of in the . . .

Judicature Act is not the prerogative mandamus, but only a man-
damus which may be granted to direct the performance of some
act, of something to be done, which is the result of an action
where an action will lie.”

D. C.
1912

Rich

Melanc-

THON

Board of
Health.

Middleton, J.

In the c&se already quoted, Kennedy, J., deals with the series
of cases in which an action for mandamus had been successfully
brought against public bodies, by stating that they are all cases
where there was a debt and “in which the relief by mandamus
might properly be termed ancillary relief.”

The cases in our own Courts dealing with the right of a physi-
cian employed by a Local Board of Health, shew that there is
no debt. The situation is analogous to that existing in The King
v. Beeston (1790), 3 T.R. 592, where a mandamus was issued
against the churchwardens and overseers directing payment
of a sum payable out of certain parish funds, upon a contract
which the parish overseers had made under a statutory power —
the churchwardens not being “technically a corporation; but as
far as concerns the regulation of the poor of the parish they
stand in pari rationed Upon the same principle, it is said in
Mayor, etc., of Salford v. County Council of Lancashire (1890),
25 Q.B.D. 384, that an action for mandamus would not lie, because
there was no debt, and the plaintiffs’ only remedy was by the per-
emptory writ of mandamus.

Under our practice, the peremptory writ of mandamus having
been superseded by the simple procedure of Con. Rule 1091,
the convenience urged in some of the English cases in favour of
the action of mandamus disappears. Apart from this, the great
weight of modern authority is in favour of the view I have indicated,
that the mandamus which may be awarded in an action is either

ONTARIO LAW REPORTS.

D. C.
1912

Rich

Melanc-

THON

Board of
Health.

Middleton, J.

[VOL.

in the nature of the old equitable mandatory injunction, or is
merely ancillary to the enforcement of a legal right for which
an action might be maintained at law.

It should also be borne in mind that the County Court has no
jurisdiction to grant a peremptory writ. While the Con. Rules
govern the practice and procedure in County Court actions,
they do not confer any jurisdiction upon the County Court. The
jurisdiction of the County Court must be sought in the County
Courts Act; and, while the County Court has jurisdiction in
actions for equitable relief, where the subject-matter does not
exceed $500, and while it has “as regards all causes of action
within its jurisdiction . . . power to grant . . . such
relief, redress or remedy . . .by the same mode of pro-
cedure, and in as full and ample a manner as might and ought
to be done in the like case before the High Court/’* it has not
the right to entertain an application for the old prerogative writ,
this being vested in the High Court only.

Action and appeal dismissed without costs.

*County Courts Act, 10 Edw. VII. ch. 30, sec. 28.

XXVI.]

ONTARIO LAW REPORTS.

[DIVISIONAL COURT.]

Wadsworth v. Canadian Railway Accident Insurance Co.

Accident Insurance — Death Claim — Cause of Death — Construction of Poli-
cies — ■“ Caused by the Burning of a Building” — “ Injuries Happening
from Fits” — Efficient Cause — Quantum of Indemnity.

W., who was insured by the defendants under two policies of accident in-
surance, entered a wooden building at night, with a lighted lantern;
while there he had a fit, and in the fit dropped or knocked over the
lantern; the lantern exploded or was broken, the oil escaped from it,
and a flame arose, which enveloped the deceased, and inflicted injuries
from which he died: — -

Held, that the injuries were not “caused by the burning of a building,”
within the meaning of a double indemnity clause in the policies.

And held (Latchford, J., dissenting), that the case was not one of “in-
juries happening from any of the following causes . . .” — one of

the causes specified being “fits” — within the meaning of a clause in the
policies limiting the amount payable in such cases to one-tenth of the
amount of the single indemnity. The fit was not the efficient cause of
the death. The injuries “happened” not from the fit but from the fire.
The cause of an efficient cause is not itself an efficient cause or causa
causans.

Review of the authorities.

Judgment of Middleton, J., varied.

Appeal by the plaintiff from the judgment of Middleton,
J., who tried the action without a jury at Ottawa, in so far as
the judgment was against the plaintiff.

The action was brought to recover the amounts due under
two policies of accident insurance issued by the defendants to
John Allen James Wadsworth in favour of his wife, the plaintiff.

The two policies were in the same form. The insurance
was stated to be “ against bodily injuries caused solely by ex-
ternal, violent, and accidental means// as specified in a schedule,
and “ against disability from sickness.” The principal sum of
each policy was stated to be, in the first year $5,000, with 5 per
cent, increase annually for ten years, amounting to $7,500.
Under “ Schedule of Indemnities,” it was stated in “Part A”
that, “if any of the following disabilities shall result from such
injuries alone, within ninety days from the date of accident, the
company will pay in lieu of any other indemnity ... for
loss of life, the principal sum.” For loss of both hands, loss of
entire sight, etc., the principal sum was also payable. “Part
C,” headed “Double Payments,” stated: “If such injuries are
sustained while riding as a passenger ... or are caused
by the burning of a building in which the insured is therein (sic)

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at the commencement of the fire, the amount to be paid shall
be double the sum specified in clause under which the same
arises.” “Part G: In case of injuries happening from any of
the following causes . . . fits, vertigo, sleep-walking, duel-
ling . . . causing . . . the company will pay one-tenth

of the amount payable for bodily injuries as stated in Part A.

. ” “Part H: In case of the happening of injuries men-
tioned in special indemnity clauses D, E, F, and G, claims shall
be made only under said clauses, and the amount to be paid
under said clauses shall be the full limit of the company’s liability,
and such claim shall not be entitled to double benefit as provided
in Part C.”

The policies were dated respectively the 24th December, 1907,
and the 30th July, 1909, and all the premiums were paid by
Wadsworth until his death on the 24th, October, 1910.

The plaintiff alleged that the case came within “Part C,”
death being “caused by the burning of a building in which the
insured is ... at the commencement of the fire,” and
claimed $11,000 and $10,500 under the policies respectively.
The defendants tendered $1,075, which was refused. The de-
fendants took the position that “Part G” and “Part H” applied,
and that the utmost to which the plaintiff was entitled was $550
under one policy and $525 under the other.

The trial Judge found that the death of the assured resulted
from a fit, which caused the upsetting of a lantern, whereby the
building in which the assured was was set on fire, and the
assured received the injuries from which he died; and the
judgment at the trial in favour of the plaintiff was, therefore,
limited to the two sums of $550 and $525; and the plaintiff
appealed.

November 1, 1911. The appeal was heard by a Divisional
Court composed of Falconbridge, C.J.K.B., Riddell and
Latchford, JJ.

R. V. Sinclair, K.C., and H. Aylen, K.C., for the plaintiff,
argued that the evidence did not justify the findings of the learned
trial Judge, that the death of the deceased was caused by a fit,
and that he was subject to the form of epilepsy known as petit
mat. The latter finding was based on the evidence of a medical
witness, and was a mere inference from a previous attack, which

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the Judge found to have been a faint. Probably the deceased D - c -
~ 1912

became unconscious owing to his weak condition, and the lantern

exploded, the result being that the building was set on fire, and Wadsworth
the insured suffered the injuries which were the cause of his death. Canadian
Even if the deceased did have a fit, that was not the efficient Accidbot
cause of his death. As regards the double liability clause, they Insurance
argued that the injuries were “ caused by the burning of a build-
ing/’ within the meaning of the policy, and that it was not neces-
sary that the building should have been wholly burned, in order
to sustain the plaintiff’s claim. The following cases were re-
ferred to: Lawrence v. Accidental Insurance Co. (1881), 7 Q.B.D.

216; Winspear v. Accident Insurance Co. (1880), 6 Q.B.D. 42;

Wicks v. Dowell & Co. Limited , [1905] 2 K.B. 225; Clover Clayton
& Co. Limited v. Hughes, [1910] A.C. 242; Canadian Casualty
and Boiler Insurance Co. v. Boulter, Canadian Casualty and Boiler
Insurance Co. v. Hawthorne (1907), 39 S.C.R. 558; Mardorf v.

Accident Insurance Co., [1903] 1 K.B. 584; In re Etherington
and Lancashire and Yorkshire Accident Insurance Co., [1909]

1 K.B. 591; Reynolds v. Accidental Insurance Co. (1870), 22
L.T.N.S. 820; Houlihan v. Preferred Accident Insurance Co. of
New York (1908), 145 N.Y. St. Repr. 1048; Manufacturers’ Acci-
dent Indemnity Co. v. Dorgan (1893), 58 Fed. Repr. 945, especially
at pp. 954, 955, where the English cases are considered.

I. F. Hellmuth, K.C., and J. G. Gibson, for the defendants,
argued that, as to the question of fact, the finding of the learned
trial Judge that the injuries sustained by the insured, causing
his death, happened from “fits,” within the meaning of the policy,
was fully warranted by the evidence, and should not be dis-
turbed. As regards the construction of the policy, it was sub-
mitted that “Part G” was not a clause exempting the defendants
from liability in certain cases, but was one of several clauses
fixing their liability at different sums according to the different
risks, so the cases cited by the appellant, all of which deal with
exceptions or exemptions from liability, had no application to
the case at bar.

Sinclair, in reply.

March 9, 1912. Falconbridge, C.J.:— After long and careful
consideration, in the course of which I have many times perused
the numerous authorities cited (citations from which appear in

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my brother Riddell’s judgment), I have come to the conclusion
(with great respect and after much hesitation) that I do not
agree with the judgment appealed from, and think that it ought
to be reversed.

“Part G” of the policy which has to be construed is as follows:
“In case of injuries happening from any of the following causes,
viz., intentional injuries inflicted by the insured or any other
person (other than burglars or robbers) fits . . sleep-
walking . . . causing death, loss of sight or limb . .. . the

company will pay one-tenth of the amount payable . . . ”

It is by no means easy to construe; and, as my brother Middle-
ton says, in none of the cases is there any attempt to construe
such a clause.

I do not know whether there is any light shed on the subject
by consulting the dictionaries as to the meaning of the verb “to
happen” (same root as “capio”). The Imperial defines it: “1.
To come by chance; to come without one’s previous expectation;
to fall out. . . . 2. To come; to befall.” Murray (Oxford

Dictionary) says: “To come to pass (originally by ‘hap’ or
chance); to take place; to occur, betide, befall. The most
general verb to express the simple occurrence of an event, often
with little or no implication of chance or absence of design.”
While the clause does not aim to destroy absolutely the
liability of the company, yet its language is intended to limit
that liability to a fractional amount of the sum payable under
other circumstances, and so it ought to be construed strongly
against the company. The insurer accepts the policy with the
view and for the purpose of covering all accidents which may
(“happen” to him. In In re Etherington and Lancashire and
Yorkshire Accident Insurance Co., [1909] 1 K.B. 591, Vaughan
Williams, L.J., says, at p. 596: “I start with the consideration
that it has been established by the authorities that in dealing
with the construction of policies, whether they be life, or fire,
or marine policies, an ambiguous clause must be construed against
rather than in favour of the company.” Farwell, L.J., at p.
600, expresses the same view.

The cases of Winspear v. Accident Insurance Co., 6 Q.B.D.
42, and Lawrence v. Accidental Insurance Co., 7 Q.B.D. 216
followed in the United States in Manufacturers’ Accident In-

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demnity Co. v. Dorgan, 58 Fed. Repr. 945, would be absolutely
in point if in the Lawrence case the fit had started the train which
passed over the deceased, and in the Winspear case the fit had
set loose the flow of water which drowned the insured. But,
on a consideration of the numerous cases on the subject of proxi-
mate cause and causa sine qud non — e.g., the illustration that
the birth of the insured was a cause of the accident, inasmuch
if he had never been born the accident could not have happened —
I have arrived at the conclusion that, notwithstanding the finding
of the trial Judge, which we are bound to accept, that it was
the fit that caused the upsetting of the lantern and the subse-
quent fire, the injuries “ happened” not from the fit but from
the fire.

Therefore, I agree with my brother Riddell in thinking that
the appeal should be allowed in part, and judgment entered for
the plaintiff for $10,750 ana interest from the teste of the writ;
the plaintiff to have costs of the trial; no costs of appeal to either
party.

Riddell, J.: — This is an appeal from the judgment at the
trial by Mr. Justice Middleton, without a jury, at Ottawa, June,
1911. John Allen James Waasworth, a man of some means,
living in Ottawa, procured from the defendants two policies of
accident insurance of date the 24th December, 1907, and the
30th July, 1909, respectively, in favour of his wife, the plaintiff.
The material part of the policies — they are in the same form —
is here subjoined: —

“The Canadian Railway Accident Insurance Company,
Ottawa, Can., in consideration of the statements, agreements

. in the application and of the annual premium of

payable does hereby insure

John Allen James Wadsworth . . . against bodily injuries

caused solely by external, violent and accidental means, as speci-
fied in the following schedule (subject, however, to the terms and
conditions hereinafter contained), and against disability from
sickness, as follows: —

“This policy may be renewed from year to year upon pay-
ment of the annual premium, payable as aforesaid in each year
during the continuance in force thereof, and the payment of

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each consecutive full year’s renewal premium of this policy shall
add five per cent, to the principal sum of the first year until
such additions shall amount to fifty per cent., and thenceforth
so long as this policy is maintained in force the insurance shall
be for the original sum plus the accumulation of fifty per cent.,
as aforesaid.

“The principal sum of this policy in the first year is $5,000;
with five per cent, increase annually for ten years will amount
to $7,500.

“SCHEDULE OF INDEMNITIES.

“Part A. — If any of the following disabilities shall result from
such injuries alone, within ninety days from the date of accident,
the company will pay in lieu of any other indemnity:

In One Payment

For Loss of Life the principal sum

For Loss of Both Hands by severance at or

above the wrist the principal sum

For Loss of Both Feet by severance at or

above the ankle the principal sum

For Loss of One Hand at or above the
wrist, and One Foot at or above the

ankle the principal sum

For Loss of Entire Sight of Both Eyes, if

irrecoverably lost the principal sum

For Loss of Either Hand by severance at or

above the wrist of “ “

For Loss of Either Foot by severance at or

above the ankle of “ “

For Loss of Entire Sight of One Eye, if

irrecoverably lost 1 / 3 of “ “

“The payment of one principal sum in any case shall end this

policy.

“DOUBLE PAYMENTS.

“Part C. — If such injuries are sustained while riding as a
passenger in any passenger steamship or steamboat, or in any
steam, cable or electric passenger railway conveyance, or in a

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passenger elevator, or are caused by the burning of a building in
which the insured is therein at the commencement of the fire , the
amount to be paid shall be double the sum specified in clause
under which the claim arises.

“Part G. — In case of injuries happening from any of the follow-
ing causes, viz., intentional injuries inflicted by the insured or
any other person (other than burglars or robbers), fits, vertigo,
sleep-walking, duelling, war or riot, exposure to unnecessary
danger, engaging in bicycle, automobile or horse racing, or while
under the influence of intoxicating liquors or narcotics, causing
death, loss of sight or limb as stated in Part A, the company will
pay One-Tenth of the amount payable for bodily injuries as stated
in Part A, under which claim arises; or, if such injuries result
in total or partial disability as provided in Part B, the company
will pay One-Tenth of the amount payable for weekly indemnity
as stated in said Part B, under which claim arises.

“Part H. — In case of the happening of injuries mentioned
in special indemnity clauses D, E, F and G, claims shall be made
only under said clauses, and the amount. to be paid under said
clauses shall be the full limit of the company’s liability, and such
claim will not be entitled to double benefit as provided in Part C.”
(The italics are mine).

Wadsworth paid all premiums due until his death on the
24th October, 1910, under circumstances which will be set out
later in this judgment. The widow claimed that the case came
within Part C, as being “caused by the burning of a building
in which the insured is therein (sic) at the commencement of the
fire,” and claimed $11,000 and $10,500 under the policies respec-
tively; the company tendered $1,075, which was refused. The
position taken by the company was, that Parts G and H applied,
and that the whole amount (if anything) to which the plaintiff
was entitled was $550 under the one policy and $525 under the
other.

On action brought, the defendants pleaded that Wadsworth
had in the application represented that he had never had and
was not subject to fits, or disorder of the brain, or any bodily
or mental infirmity, which the company alleged was untrue, as

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62 ONTARIO LAW REPORTS. [vol.

he had had and was subject to fits or vertigo; and these mis-
statements were material.

At the trial, it was decided, on satisfactory evidence, that
the only instance of illness or anything which could be considered
as coming under the description did not take place till long after
Insurance the issue of the policies; and there is nothing to indicate that

vO.

there was any misrepresentation. The other defence the learned

Ridden, j. trial Judge gave effect to; and this forms the subject of the
present appeal.

The facts surrounding the death of the insured are not com-
plicated. In October, 1910, the insured went, with other mem-
bers of a hunting club, to their club-house in the township of
Hincks. On the 23rd October, some of the members of the club
were out all day hunting; and, when they came in comparatively
late and after * supper-time, Wadsworth, who does not seem to
have been out that day in the afternoon, said he was not feeling
well and did not feel like eating — he did not have any supper
and went and lay down upstairs. About 8.20 or 8.30 he came
downstairs, declined an offer of something to eat, and asked the
chore boy to open a bottle which he had. This the boy did;
and the deceased, dissolving a tablet in some fluid out of this
bottle, drank the solution. He then left the room and went
outside. A dog was heard barking shortly after; and, when
the boy went out to investigate, he noticed the water-closet on
fire. The alarm was raised, and a number of persons ran to
the burning building with water; after the fire was extinguished
at least in part, the deceased was found sitting at one end of
the building and on the opening of the seat of the closet, or
perhaps the boards of the seat, leaning back against the well,
his trousers not lowered. He was taken out moaning, apparently
in pain, carried limp as he was to the club-house and put on
a table. He was found to be rather badly burnt about the feet,
up the back of the buttocks, and around the face and head;
also a patch on the chest and on the shoulders.

He received treatment from a medical man who was one of
his club-mates, and was shortly thereafter removed to Ottawa
and placed in the Carleton General Hospital, where he died the
next day, of shock.

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The closet was a small building, some 4^ or 5 feet long and
about as much in depth, with no front but with wooden sides and
back, and with two holes in the seat.

Next day, the boy found in the bottom ( i.e ., as we are inform-
ed, the pit) the side of an ordinary stable lantern, such as was in
use at the club for going out with; and, while Wadsworth had
not taken a lantern out with him, so far as the witness could
say, there was one noticed missing next day. It seems fairly
clear that Wadsworth took the lantern with him to light him
to the closet, it being quite dark when he went out, and it being
usual to take a lantern on such occasions.

The building was not burnt, not even badly scorched, and
there was no smell of oil on the day after the accident, when
Labelle found the lantern; no considerable part of the lantern
seems to have been found except the “side” which was found in
the pit — the globe was not found, but one witness saw, on the
night of the casualty, broken glass, the shape of a globe, lying
on the platform or floor of the closet opposite one of the seats.
We are told that this was at the opposite end of the closet from
where Wadsworth was found, but I do not find this made clear
upon the evidence, and I cannot say that it is material one way
or the other.

In July of the same year, Wadsworth, at the same club-
house, after dinner, “seemed to faint away;” it was very warm,
but he did not seem to be suffering from the effects of the heat.

The medical man who attended him at the club gave a cer-
tificate on the 29th October, saying, amongst other things: “I
can only account for his getting burned by believing that he
must have taken a fit or fainted and in so doing upset the lantern,
thus setting himself on fire. Everything in connection with the
burning seems to indicate this.”

From the evidence of this medical man and another called at
the trial, my brother Middleton came to the conclusion that the
unfortunate man “took a fit when he ‘was in the closet, and
that, while in that fit, he either dropped or knocked over the
lantern, the lantern exploded or was spilled or was broken by
the fall, the result was that the oil escaped, and there was almost
immediately a very extensive flame, which enveloped him and
inflicted the very severe injuries from which he died.” And

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the deceased was affected with a “malady . . . known

as minor epilepsy or petit mat”

I think my learned brother’s conclusion amply sustained by
the evidence; and I have arrived at the same conclusion from
an independent consideration of the facts as proved.

It seems to me also clear that the injuries were not “caused
by the burning of a building” at all.

What is said about the building is, indeed, that it was on
fire, not very badly scorched; the cook told others of the fire;
that the closet was on fire; but, as one of the witnesses threw
a pail of water upon the roof, it may perhaps be inferred that
the building did burn — that it was a “burning building” within
the meaning of the policy — as in law ( Regina v. Parker (1839),
9 C. & P. 45, per Parke, B.), it is sufficient that it be scorched
and charred in a trifling way.

But the condition of Part C is not that the injuries be sus-
tained while in a burning building; the language is not the same
as in the former part of Part C,” “sustained while riding . . .

in any .... steamboat . . . railway conveyance

.” — the words are not “sustained while in a burning
building,” but “caused by the burning of a building.” We are
referred to Houlihan v. Preferred Accident Insurance Co. of New
York, 145 N.Y. St. Repr. 1048, as deciding that the two expres-
sions are synonymous. In that case the leading judgment by
Clarke, J. (in which all but one of the other Judges concurred,
and he agreed in the result), says (p. 1050): “It must be that
what was attempted to be guarded against was injury in the
insured resulting from fire while in a building.” In this con-
clusion I am unable to agree — the words “caused by the burning
of a building” have a clear and unambiguous meaning, and a
meaning distinctly differing from that of the words employed
by the learned New York Judge. Nor, in my view, does the
case of Northrup v. Railway Passenger Assurance Co. (1871),
43 N.Y. 516, cited as supporting the conclusion, assist, even if
it be well decided — that being simply a decision that, where a
passenger had to walk from a railway station to a steamboat
landing, 70 rods distant, she did not cease to be “travelling
by . public conveyance provided for the transportation

of passengers.”

XXVI.]

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But, if we were to give full authoritative weight to the Houlihan
case, I do not think that, even then, the plaintiff would have
made out her case. There the bedclothes and mattresses of the
bed upon which the deceased slept were burned, her night clothes
were burned from her and other circumstances shewed that it
was the burning of permanent or quasi-permanent furnishing
and contents df the room which set fire to her — it was not, a$
in this case, the blazing up and burning of oil brought by the
deceased into the room for a purely temporary purpose. What-
ever may be the law in the case of the burning being caused by
the ignition of permanent or quasi-permanent contents of a room,
I venture to think that no stretch of language can reasonably
make injuries caused by the burning of oil which is brought into
the room by the insured for a temporary personal purpose only
come within the meaning of the words “ caused by the burning
of a building.”

This claim of the plaintiff is, in my view, not well founded.

Then, as to the application of Parts G and H. The meaning
of G, so far as affects the present case, is: “In case of injuries
which happen from fits or vertigo, and which injuries cause
death, the company will pay one-tenth of the amount stated in
Part A” — the participle “causing,” in the third line, being in the
same grammatical relation as the participle “happening” in the
first line. The clause does not mean, “In case of injuries which
happen from fits or vertigo, which fits or vertigo cause or causes
death,” etc., etc.

The only question then is, whether the injuries happened
from fits or vertigo, because they undoubtedly did cause death.

In considering this question, we must look at the case from
a common sense, business point of view, avoiding metaphysical
subtlety; ever having in mind that such agreements, being in
the language selected by the company, should, where there is
a real ambiguity, be construed most strongly against the company,
we are not, by too refined or unnatural an interpretation of the
language employed, to conjure up an ambiguity where none
really exists.

“It is only a fair rule . . . which Courts have adopted

to resolve any doubt or ambiguity in favour of the insured and
against the insurer:” Manufacturers’ Accident Indemnity Co. v.

5 — XXVI. O.L.E.

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Dorgan, 58 Fed. Itepr. 945, at p. 956, per Taft, J. (now President
Taft) ; but it would Pot be a fair rule to invent or imagine doubt
or ambiguity where none can be found.

In view of the law as laid down by the decisions, I do not
think, however, that there can be said to be any ambiguity or
doubt.

The injuries which caused the death are the burns — did these
happen from fits or vertigo?

I do not lay any stress whatever on the use of the plural
“fits” — nor do I think that if the cause were an epileptic fit,
the plaintiff could recover because the plural is used in the policy
instead of the singular. “Fits” is colloquially the same as “fit:”
cf. Murray, New English Diet., sub voc. “Fit,” pp. 262 ad fin.,
263 ad. init. c, d. Also in the English cases of epilepsy, which
will be cited, the words “fits” is used in the policy, but the in-
sured had only the one fit — indeed, in case at least of death, it
would scarcely appear that more than one fit was to be con-
sidered; The burns were caused primarily and immediately by
the fire — the fire was the proximate cause. In philosophy it is
said “ causa causae causantis , causa causans ipsa ” — and if, in
law, the cause of the proximate cause were itself an efficient
cause, there would be no difficulty in the present case. No
doubt, the fire was caused by the fits and vertigo. Does that
make these an efficient cause?

Two recent cases in England are strongly pressed upon us.
In W inspear v. Accident Insurance Co., 6 Q.B.D. 42, the policy
did not extend to “any injury caused by or arising from natural
disease or weakness or exhaustion consequent upon disease.”
W., being the insured, was overtaken by an epileptic fit when
fording a shallow stream; he fell down in the stream and was
drowned. It was argued that “it was the fit which caused the
drowning, for even after the insured had fallen into the stream
he could have got his head out of the water but for the fit.” The
Court of Appeal (Lord Coleridge, C.J., Baggallay and Brett,
L.JJ.), however, held that the insurance company was liable,
and that the death was not caused by any natural disease or
weakness, but by the accident of drowning — that “those words
in the proviso . . . point to an injury caused by natural

disease, as if, for instance, in the present case, epilepsis had

XXVI. ]

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really been the cause of death.” There are two points of dis-
tinction between the Winspear case and ours: (1) there the

cause of death was being considered; in ours, the cause of the
happening of injuries; (2) there the epilepsy was not the cause
of the presence of the water which drowned; here, the epilepsy
was in a sense the cause of the fire which burned.

The Winspear case is referred to and followed in an American
case, Manufacturers’ Accident Indemnity Co. v. Dorgan, 58 Fed.
Repr. 945, in which an elaborate and careful judgment is given
by the present President of the United States, then Mr. Justice
Taft. The deceased had been “ overtaken by some temporary
trouble, ’ ’ which caused him to fall into a brook, upon whose
banks he was at the time; he was drowned. The insurance
company was held liable, although the policy provided that they
should not be liable for “ accidental injuries or death resulting
from or caused, directly or indirectly, wholly or in part, by or
in consequence of fits, vertigo,” etc., etc., “nor to any cause
excepting where the injury is the sole cause of the disability
or death.” This case goes no further than the Winspear case.

The other English case most strongly relied upon is Lawrence
v. Accidental Insurance Co., 7 Q.B.D. 216. The policy did not
insure in case of death arising from fits. The insured, standing
at a railway station, was seized by a fit and fell forward off the
platform when a train was passing— this went over his body and
killed him. It was argued for the company that “the accident
actually arose from the disease” (p. 218), but the Court, Den-
man, J., held them liable. He says (p. 219): “Now, the imme-
diate cause of death is not in the least disputable, but there is
no doubt that if he had not fallen there in consequence of the
fit he would not have suffered death, and in that sense the fit
led to his death. The question is whether that was merely one
of several events which brought about the accident, in the sense
that it caused the accident to happen by causing him to be there,
or whether it was, within the meaning of this proviso, a cause
of death which would prevent the policy applying to the case.”
In other words, was the fit a causa causans or a mere causa sine
qua (so-called) or condition? Watkin Williams, J., agreed.
Quoting Lord Bacon’s Maxims of the Law, Reg. 1— “It were
infinite for the law to consider the causes of causes, and their

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impulsions one of another; therefore it contenteth itself with
the immediate cause” — he says: “According to the true principle
of law, we must look at only the immediate and proximate cause
of death, and it seems to me to be impracticable to go back to
cause upon cause, which would lead us back ultimately to the
birth of the person, for if he had never been bom the accident
would not have happened. The true meaning of this proviso
is that if the death arose from a fit, then the company are not
liable, even though accidental injury contributed to the death
in the sense that they were both causes. . . .It is essential

to that construction that it should be made out that the fit was
a cause in the sense of being the proximate and immediate cause
of the death, before the company are exonerated, and it is not
the less so, because you can shew that another cause intervened
and assisted in the causation.”

The same remarks apply to this as to the case in 6 Q.B.D. —
the fit did not cause the train to come along — it was not the cause
itself of the causa proximo.

To the same effect are the remarks of Collins, M.R., in Wicks
v. Dowell & Co., [1905] 2 K.B. 225, at p. 228, which case does
not assist — nor am I able to derive any assistance from Mar dor f
v. Accident Insurance Co., [1903] 1 K.B. 584.

If, in the case in 6 Q.B.D., the falling of the insured had let
in the water which drowned him — or, in the case in 7 Q.B.D.,
the falling had automatically brought on the engine, the cases
would be parallel with the present — but that is not the case;
and, as a consequence, these cases are not conclusive.

But there are cases in which the proximate cause is not accom-
panied by another cause ( causa sine qua non), but has been
actually caused itself by another cause, and it has been held
that this last-named cause is not to be considered as the causa
causans — to use Lord Bacon’s terminology, we are not to look
to the causes of causes.

In Busk v. Royal Exchange Assurance Co. (1818), 2 B. & Aid.
73, the servants of the assured negligently lighted a fire in the
insured ship, whereby she was burned. The case was elaborately
argued by Campbell and Bosanquet. Bayley, J., says, giving
the judgment of the Court (p. 80): “In our law at least, there
is no authority which says that the underwriters are not liable

XXVI. ]

ONTARIO LAW REPORTS.

for a loss, the proximate cause of which is one of the enumerated
risks, but the remote cause of which may be traced to the mis-
conduct of the master and mariners.’ ’ The very learned Judge

refers to many authorities also in foreign laws, and holds “that
the assured are entitled to recover, as for a loss by fire, although
that fire was produced by the negligence of the person having
the charge of the ship at the time.”

Walker v. Maitland (1821), 5 B. & Aid. 171, at p. 175, Bishop
v. Pentland (1827), 7 B. & C. 219, at p. 223, Phillips v.Nairne
(1847), 4 C.B. 343, at pp. 350, 351, Patapsco Insurance Co. v.
Coulter (1830), 3 Peters (S.C.) 222, at p. 233, Columbia Insurance
Co. v. Lawrence (1836), 10 Peters (S.C.) 507, at p. 517, General
Mutual Insurance Co. v. Sherwood (1852), 14 How. S.C. 351, at
p. 366, may also be looked at upon the general principle, but
must be read with caution, as they have not the so-called remote
cause, always the cause itself of that which is proximate.

A nice distinction is indicated by Story, J., giving the judg-
ment of the Supreme Court of the United States, in Waters v.
Merchants’ Louisville Insurance Co. (1837), 11 Peters (S.C.) 213.
In that case, barratry not being insured against, the Circuit
Court divided in opinion, and the Supreme Court was asked,
amongst other things: (1) Does the policy cover a loss of the
boat by a fire, caused by the barratry of the master and crew?
(2) Does the policy cover a loss of the boat by fire, caused by
the negligence, carelessness, or unskilfulness of the master and
crew of the boat, or any of them? The learned Judge says (p.
219), upon the first question: “It assumes that the fire was
directly and immediately caused by the barratry of the master
and crew, as the efficient agents. ... In this view of it,
we have no hesitation to say, that . . . such a loss is properly

a loss attributable to the barratry, as its proximate cause, as it
concurs as the efficient agent, with the element, eo instanti, when
the injpry is produced.” But, as to the second question, it was
held that the negligence could be only causa remota.

In our own Courts the case Canadian Casualty and Boiler
Insurance Co. v. Boulter, Canadian Casualty and Boiler Insurance
Co. v. Hawthorne, 39 S.C. R. 558, and in the Court below, Haw-
thorne v. Canadian Casualty and Boiler Insurance Co., Boulter
v. The Same (1907), 14 O.L.R. 166, are in point. There the

D. C.
1912

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Canadian

Railway

Accident

Insurance

Co.

Riddell, J.

70 ONTARIO LAW REPORTS. [vol.

policies contained a clause that they did not cover loss or damage
resulting from freezing. A pipe connected with the sprinkler-
tank system burst from freezing, and the water ran down upon
and injured the stock. The trial Judge, the Chief Justice of
the King’s Bench, gave judgment for the insured, and this was
sustained by the Court of Appeal and the Supreme Court — one
Judge dissenting in each Court. The Chief Justice of the King’s
Bench does, indeed, suggest that the freezing was the cause of
the injury, though not of the damage; but that must be read
in connection with the facts of the case. It would appear also
that the use of the word “ immediate” had some influence on
the Supreme Court. But, taking the case as a whole, I think it
is authority for saying that the cause of an efficient cause is not
itself an efficient cause or causa causans.

I think the appeal should be allowed in part, and judgment
entered for the plaintiff for $10,750 and interest from the teste
of the writ. The plaintiff should also have the costs of the trial;
success being divided, there should be no costs of the appeal.

The following have a more or less indirect bearing upon the
matters discussed: Trew v. Railway Passengers Assurance Co.
(1860), 5H.&N. 211; S.C. (1861), 7 Jur. N.S. 878 (Cam. Scacc.);
Reynolds v. Accidental Insurance Co., 22 L.T.N.S. 820; In re
Etherington and Lancashire and Yorkshire Accident Insurance Co.,
[1909] 1 K.B. 591; Clover Clayton & Co. Limited v. Hughes,
[1910] A.C. 242; Dudgeon v. Pembroke (1877), 2 App. Cas. 284;
Accident Insurance Co. v. Crandal (1887), 120 U.S. 527; Canadian
Railway Accident Insurance Co. v. Haines (1911), 44 S.C.R. 386.

Latchford, J. : — I think the finding of the learned trial Judge,
that the accident to the deceased happened because of a fit,
is amply warranted by the evidence.

It is urged, however, that the death of Wadsworth resulted
from burns, and not from fits; and that, therefore, Part G should
not have been considered in determining the amount payable
by the defendants.

The insurance is expressed to be “against bodily injuries
caused solely by external, violent, and accidental means,” as
specified in a schedule.

D. C.
1912

Wadsworth

Canadian

Railway

Accident

Insurance

Co.

Riddell, J.

XXVI.]

ONTARIO LAW REPORTS.

In the first part of the schedule, under the heading “ Schedule
of Indemnities,” it is provided — “Part A” — that, “if any of the
following disabilities shall result from such injuries alone, within
ninety days from the date of accident, the company will pay,
in lieu of any other indemnity, for loss of life . . . hands

. . . . feet . . . entire sight of both eyes . . . the

principal sum.” This sum is $5,000 under each of the two
policies sued on, with an annual increase at the rate of five per
cent.

Loss of life is thus defined as “a disability r”

A disability, to form the basis of any claim against the com-
pany, “ shall result from . . . bodily injuries . . . caused

solely by external, violent, and accidental means.”

The foundation of the plaintiff’s action is, that her husband’s
death resulted from or was caused by injuries which were them-
selves caused by specified means. Mrs. Wadsworth was obliged
to establish and did establish that external, violent, and acci-
dental means caused injuries to her husband, and that injuries
caused by such means caused his death.

So much it seems to me necessary to premise before coming
to the consideration of the particular provisions of the contract
around which the parties are contending.

The defendants allege and the plaintiff denies that Part G
of the schedule affects, in the circumstances of the case, the amount
to which Mrs. Wadsworth is entitled. If it does apply, the
appeal fails; and the question whether it applies or not is, upon
the facts as found, merely one of construction.

Part G has on principle to be construed upon a consideration
of the whole contract. A policy of insurance is, in the words
of Lord Ellenborough in Robertson v. French (1803), 4 East 130,
at pp. 135, 136, “to be construed, according to its sense and
meaning, as collected in the first place from the terms used in
it, which terms are themselves to be understood in their plain,
ordinary, and popular sense, unless . . . the context evi-

dently points out that they must in the particular instance,
and in order to effectuate the immediate intention of the parties
to that contract, be understood in some other special and peculiar
sense.”

The main object and intent of the contract may be regarded

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Railway

Accident

Insurance

Co.

Latchford, J.

ONTARIO LAW REPORTS.

[VOL.

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Latchford, J.

as limiting any general words used having in view that object
and intent: Lord Herschell, L.C., in Glynn v. Margetson & Co.,
[1893] A.C. 351, at p. 355.

Part G cannot in any way be considered as in derogation of
the object and intent of the contract. It is, as it purports to
be, a part of the contract, and fixes the amount payable when
death ( inter alia ) occurs from injuries resulting in certain ways
from any of certain stated causes. If the language is clear, it
may be construed upon the principles I have referred to; and
there is no good reason why it should be given what is some-
times called a benign interpretation.

So far as material here, the provisions of Part G have reference
to the “case of injuries happening from any of the following causes,
viz., intentional injuries . . . fits . . . causing death,

loss of sight or limb.” “Causing” appears from the context of
the whole clause to be in the same grammatical relation to “in-
juries” that “happening” is.

Part G clearly applies whenever injuries which cause death
“happen” by accidental means from any of the specified causes,
including a fit or “fits.”

The injuries from which Wadsworth died happened from “fits,”
according to the finding of the trial Judge.

For the plaintiff it is contended that the “fits” must be
shewn to be the immediate, proximate cause of death, before the
defendants can invoke the provisions of Part G in their favour.
So to construe Part G is, in my opinion, to subject it to a strain
which, upon consideration of the whole contract, it cannot bear.

“In case of injuries,” in Part G, has reference manifestly to
injuries of the kind insured against — injuries resulting in dis-
ability, and “caused solely by external, violent, and accidental
means.” The succession of events directly resulting from the
paroxysm — the overturning and breaking of the lighted lantern,
the escape and ignition of the oil, the flames which enveloped
Wadsworth, his inability owing to unconsciousness to give any
alarm or extinguish his burning clothing — all are, in my opinion,
but “means,” within the true intendment of the policy, lying
between the fit as a cause and the injuries as an effect of that
cause. This conclusion appears all the more reasonable if one
considers some of the “causes” enumerated in the same category

XXVI.]

ONTARIO LAW REPORTS.

as “fits.” “Sleep-walking,” for instance, cannot be the imme-
diate cause of “injuries causing death, loss of sight or limbs.”
Some accident must intervene; some means must lie between
the mere somnambulism and any serious injury caused while in
that state.

No support is, I think, given to the plaintiff's contention
by the cases which have been cited on her behalf. They are but
illustrations of the application of the maxim, In jure non remota
causa sed proxima spectatur ; and they apply, in matters of con-
tract, wherever the agreement either expressly or by implica-
tion provides that the immediate cause must be looked to.

The many cases in which liability of insurers for loss caused
by fire has been considered are authority for the proposition
that, where such a loss has been insured against, it is immaterial
that the fire itself was caused by the negligence of the agents
or servants of the assured. The fire was the proximate cause
of the loss sustained, and the cause of that cause could not be
regarded. But, if the policies had provided that there should
be no liability in case the fire resulted from such negligence, the
decisions referred to would have been given for the defendants.

The case is not, to my mind, one in which it is necessary to
consider whether the epileptic paroxysm was or was not the
immediate and proximate cause of death. If it were, I should
feel myself bound by Winspear v. Accident Insurance Co., 6
Q.B.D. 42, and Lawrence v. Accidental Insurance Co., 7 Q.B.D.
216. In both of these cases, as Lord Justice Collins points out in
Hensey v. White, [1900] 1 Q.B. 481, at p. 485, there was a for-
tuitous unexpected element — the presence of a stream in the
one case and of a moving railway train in the other — which
turned a normal condition of affairs into a catastrophe. The
fit did not cause the stream to drown Winspear. His condition
did not cause the stream to flow where it was flowing when he
fell into it. Lord Justice Collins points out that it was just as
though the epileptic had been struck by lightning while lying
on the ground. Nor did the fit in the Lawrence case cause the
train to run which passed over the neck and body of the deceased.
The decision in Hensey v. White, as to what is an “injury by
accident,” within the meaning of the Workmen's Compensation
Act, 1897, was overruled in Fenton v. Thorley & Co. Limited,

D. C.
1912

Wadsworth

Canadian

Railway

Accident

Insurance

Co.

Latchford, J.

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1912

Wadsworth

Canadian

Railway

Accident

Insurance

Co.

Latchford, J.

ONTARIO LAW REPORTS. [vol.

[1903] A.C. 443; but that circumstance in no way affects the
force of the observations I have quoted.

And the reason occurs to me why the Winspear and Lawrence
cases are distinguishable. In both (as here) the insurance was,
inter alia, against death by accident. But in each there was an
exception, that there should be no liability in certain circum-
stances. The defendants were obviously liable unless they could
clearly bring themselves within the exceptions which, upon well
recognised principles, were to be construed most strongly against
the defendants. The exceptions were held not to be open to the
defendants, because the accidents were not caused directly and
proximately by the excepted causes. In the present case, the
clause Part G, relied on by the defendants, is not in the nature
of an exception. It is as much a term of the contract as the
“face,” as it has been called, of the policy, and simply states
circumstances in which the amount of the company’s liability is
to be one sum, instead of another fixed by a different term of
the policy. Moreover, the fit, as I have stated, was the causa
causans of the breaking of the lantern and of the consequent
injuries and death. If, in the Winspear case, the assured had,
because of the fit, let loose a flood of water which overwhelmed
him, or, in the Lawrence case, the assured had, because of the
fit, started the engine which killed him — the decisions, notwith-
standing the rules of construction applicable to exceptions, would
have been different.

I am unable to see any reason, either upon principle or author-
ity, why the judgment appealed from should not be affirmed.

Appeal allowed in part; Latchford, J., dissenting .

XXVI.]

ONTARIO LAW REPORTS.

[MIDDLETON, J.]

Youlden v. London Guarantee and Accident Co. 1912

Accident Insurance — Death Claim — Cause of Death — Injury from Lifting March 12
Heavy W&ight — Evidence — Statement of Deceased — Admissibility —

Conditions of Original Policy — 'Non-compliance with — Renewal Re-
ceipt — Fresh Contract — Reference to Original Policy — Sufficiency —

Insurance Act , R.S.O. 1897, ch. 203, sec. 144.

In an action by the beneficiary under a contract insuring Y. against acci-
dent and death from accident, to recover the amount payable upon
death from accident, it appeared that, on the day before his death, Y.
had lifted a heavy weight, and, shortly after doing so, had stated to
'S. that he thought he had hurt himself. According to the medical
evidence, the malady from which Y. died was caused by the invasion of
the system by pernicious bacteria, and this invasion might have been
occasioned by an internal injury: —

Held, that evidence of the statement made to S. was admissible for the
purpose of proving the physical condition of Y., and was sufficient to
establish that, shortly after Y. had been engaged in lifting, he had, as
he said, indications that he had been hurt.

Gilbey v. Great Western R.W. Co. (1910), 102 L.T.R. 202, specially re-
ferred to.

And held, that from the fact of the injury the inference might be drawn
that the lifting was the cause of it; the symptoms indicated that Y.
did suffer an injury in lifting; and, upon the evidence, this injury
was the cause of his death — it being a possible cause and the only
one of several possible causes shewn to have actually existed; and the
evidence shewed that up to the happening of the accident Y. appeared
to be in perfect health.

In re Etherington and Lancashire and Yorkshire Accident Insurance Co.,

[1909] 1 K.B. 591, followed.

The policy issued upon the original insurance, in 1902, contained pro-
visions and stipulations as to notice, made conditions precedent to the
right to recover; and these had not been complied with. This policy
did not contemplate any renewal; it evidenced an insurance for one
year only. The plaintiff relied upon what was called a renewal re-
ceipt, as a new contract of insurance. It did not contain the provi-
sions as to notice; it evidenced an insurance for a year “according to
the tenor” of the original policy, referring to it by number: —

Held, that the contract evidenced by the renewal receipt was to be re-
garded as a new insurance, depending entirely upon a new agreement
between the parties.

Carpenter v. Canadian Railway Accident Insurance Co. (1909), 18 O.L.R.

388, followed.

But held, that the reference to the former policy was a sufficient compli-
ance with the provisions of the Insurance Act, R.S.O. 1897, ch. 203,
sec. 144, requiring the terms and conditions of the contract to be set
out on the face or back of the instrument; and, therefore, by reason
of the plaintiff’s non-compliance with the conditions of the original
policy, she could not recover.

Venner v. Sun Life Insurance Co. (1890), 17 S.C.R. 394, and Jordan v.

Provincial Provident Institution (1898), 28 S.C.R. 554, followed.

The plaintiff sued as beneficiary under a policy issued by the
defendants, insuring the late Henry Youlden against accident
and death from accident, to recover the sum named in the policy.

Middleton, J,

1912

Youlden

London

■Guarantee

and

Accident

Co.

ONTARIO LAW REPORT'S. [vol.

February 27. The action was tried before Middleton, J.,
without a jury, at Kingston.

J. L. Whiting, K.C., for the plaintiff.

W. N. Tilley and C. Swabey, for the defendants.

March 12. Middleton, J. : — The deceased had been insured
with the defendants for some years, the policy having been issued
on the 7th January, 1902, and the renewal premium paid on the
2nd January, 1909.

On the 23rd June, 1909, shortly after his dinner, the de-
ceased — a member of a firm carrying on a foundry business in
Kingston — was at the railway station, superintending and assist-
ing in the loading of a retort upon a railway car. The retort
weighed about three and a half tons, and had to be transferred
from a dray to the railway car by means of jacks and other
appliances. For the purpose of making a way for removing the
retort, a heavy stick of timber, lying upon the railway premises,
was desired to be used. This weighed from five to six hundred
pounds. Youlden attempted to carry one end of this, wdiile the
other end was carried by two men. His partner Selby went
to his assistance; and shortly afterwards Youlden remarked to
him that he was afraid he had injured himself. He then sat
in the shade at the station for a time, and, feeling faint, he
went with Selby to an hotel and took a glass of whisky and
soda, and thereafter did no more work, but returned to the
shop upon a rig, and sat around doing little or nothing until six
o’clock, when he went home. The same evening, without taking
any supper, he went to a garden party, where a presentation
was to be made in which he was much interested. During the
evening he partook sparingly of ice-cream, and went home at a
little after ten o’clock. His wife, hearing that he was unwell,
followed him home; and shortly thereafter he lay down upon a
sofa to rest for the night, in a dressing-gown. During the night
he was uncomfortable and restless, could not sleep, and, his wife
said, “looked miserable and grey.” Nevertheless, he went to
the office in the morning, but stayed there only a short time, re-
turning in about half an hour. A doctor was called, and found
him weak and in pain. He had then had a violent motion of
the bowels, and appeared to be generally collapsed. By the

XXVI.]

ONTARIO LAW REPORTS.

evening his temperature was high and there was further bowel
trouble. The case developed into a case of acute enteritis, which
would not yield to treatment, and finally caused his death.

The plaintiff alleges that a strain was caused by the exertion
of lifting the timber, and that, this strain brought about a physi-
cal condition which enabled bacteria in the digestive tract to
develope to such an extent that death resulted from his in-
ability to resist their attack, by reason of the reduced vitality
following the strain in lifting the timber.

At the trial I admitted in evidence, against the protest of
the defendants’ counsel, the statement made by the deceased to
his partner Selby, shortly after he had lifted the timber, that he
thought he had hurt himself. It is argued that, apart from this,
there is no evidence of the existence of a strain. The medical
men stated that there was no physical condition indicating a
strain; that the injury, if it existed, was internal only; and
that the only knowledge they had of its existence would be
from statements made to them by the patient of his symptoms,
and the history of the case. The symptoms made it quite plain
that the malady was caused by the invasion of the system by
pernicious bacteria. This invasion, in the opinion of the doctors,
might well be occasioned by any injury to the system which
rendered it unable to manifest the normal resistance of a healthy
and uninjured individual ; but the result might follow equally
from anything which would bring about a marked reduction of
vitality, or it might follow from the introduction of pernicious
bacteria in the food taken — the latter being the general origin
of such a malady. The ice-cream taken the evening before, if
impure or tainted, would adequately account for the condition
found.

It, therefore, becomes a matter of great importance to ex-
amine the propriety of my ruling. In Garner v. Township of
Stamford (1903), 7 O.L.R. 50, the Divisional Court had to con-
sider the admissibilty of the statement made by the deceased
when she was discovered a short time after an accident upon a
highway. Her statement was made in reply to a question as to
the cause of the injury. The statement was tendered as being
part of the res gestae , but was rejected; because the rule there

Middleton, J.

1912

Youlden

London

Guarantee

and

Accident

Co.

ONTARIO LAW REPORTS.

[VOL.

Middleton, J.

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London

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Accident

Co.

invoked only makes statements admissible when they are in-
voluntary exclamations at the time of the accident, and does not
warrant the reception of statements or exclamations made after
there has been time for reflection.

Gilbey v. Great Western R.W. Co. (1910), 102 L.T.R. 202,
is a later decision of the Court of Appeal, perhaps somewhat
closer to this case. Compensation was claimed in respect of an
accident under the Workmen’s Compensation Act. It was
alleged that the deceased, while carrying a side of beef, so
strained himself as to cause an injury to his lungs. The post
mortem examination disclosed a tear in the lung and made it
plain that this brought about death. The Judge of the County
Court admitted in evidence the statements of the workman to
his wife, not merely of his sensations and of his feelings, but as
to the cause and occasion of the injury from which he was
suffering. In the judgment of the Court of Appeal the prin-
ciple applicable here is pointed out. Cozens-Hardy, M.R., says :
“I do not doubt at all that statements made by a workman to
his wife of his sensations at the time, about the pain in the side
or head, or what not — whether those statements were made by
groans or by actions or were verbal statements — would be ad-
missible to prove the existence of those sensations. But to hold
that those statements ought to go farther and to be admitted as
evidence of the facts deposed to is, I think, open to doubt; such
a contention is contrary to all authority.”

The Irish Court of Appeal, Wright v. Kerrigan, [1911] 2
I.R. 301, had before it a claim under the Workmen’s Compensa-
tion Act, where part of the evidence tendered was a statement of
the deceased to a doctor as to how the injury was received.
Cherry, L.J., mentions this evidence, saying: “Hearsay evidence
is in some cases admissible, and the learned Recorder appears to
me to have acted strictly in accordance with the settled rules
of evidence. . . . He ruled out statements as to the circum-

stances of the accident. He admitted the statements made by
the deceased man to his medical attendant . . . as to his

symptoms and their cause. Such statements are usually held
to be admissible upon the ground that there is no other means
possible of proving bodily or mental feelings than by the state-
ments of the person who experiences them.”

XXVI.]

ONTARIO LAW REPORTS.

In Amys v. Barton , [1911] W.N. 205, the accuracy of this
statement of the law was canvassed by the Court of Appeal, and
Cozens-Hardy, M.R., pointed out that the words “and their
cause” in the statement by Cherry, L.J., could not be sup-
ported, but appeared to approve of the rule as stated, with this
exception.

In the 9th edition (1910) of Powell on Evidence, p. 358, the
admissibility of statements for the limited purpose of proving
the physical condition of the person making the statement is
asserted ; and I think for this purpose the evidence was properly
admitted, and it is sufficient to establish that, shortly after the
deceased had been engaged in lifting the timber, he had, as he
said, indications that he had been hurt.

The statement, perhaps, did not go so far as to indicate that
the lifting of the, timber was the cause of the injury; but I
think that this is an inference which may be drawn from the
fact of the injury, and falls within the principle indicated in
Richard Evans & Co. Limited v. Astley, [1911] A.C. 674, 678,
where it is said: “The applicant must prove his case. This does
not mean that he must demonstrate his case. If the more prob-
able cause is that for which he contends, and there is anything
pointing to it, then there is evidence for a Court to act upon.
Any conclusion short of certainty may be miscalled conjecture
or surmise, but Courts, like individuals, habitually act upon
a balance of probabilities. ’ ’ See also the decisions of the
Supreme Court of Canada in McKeand v. Canadian Pacific R.
W. Co., not yet reported, and in Grand Trunk R.W. Co. v.
Griffith (1911), 45 S.C.R. 380.

Acting upon this principle, I find that the symptoms indi-
cate that the deceased, at this time, did suffer an injury in
lifting the timber in question; and I further find that this
injury was the cause of his death. I believe this to be the cause,
because, as I understand the medical evidence, it is a possible
cause, and it is the only one of the several possible causes which
is shewn to have actually existed. There is no evidence that
the ice-cream eaten was tainted; and the evidence satisfies me
that up to the happening of the accident the deceased appeared
to be in perfect health. This brings the case within the decision

Middleton, J.

1912

Youlden

London

•Guarantee

AND

Accident

Co.

Middleton, J.
1912

Youlden

London

GlTABANTEiE

AND

Accident

Co.

ONTARIO LAW REPORTS. [vol.

of the Court of Appeal in In re Etherington and Lancashire and
Yorkshire Accident Insurance Co., [1909] 1 K.B. 591.

It is, therefore, necessary to consider the other matters dealt
with upon the argument.

The policy, issued in 1902, contains provisions and stipula-
tions as to notice wdiich, it is admitted, were not complied with,
and which are made conditions precedent to the right to
recover.

The plaintiff contends that the terms of this policy are not
binding upon her, because the renewal receipt, as it is called,
constitutes a new contract of insurance ; and, by sec. 144 of the
Insurance Act, R.S.O. 1897, ch. 203, “the terms and conditions
of the contract” not having been “set out by the corporation in
full upon the face or back of the instrument forming or evid-
encing the contract,” “no term of, or condition, stipulation,
warranty or proviso, modifying or impairing the effect of any
such contract made or renewed after the commencement of this
Act shall be good and' valid, or admissible in evidence to the
prejudice of the assured or beneficiary.”

Is this a new contract within the meaning of the statute?
The original contract, unlike many insurance policies, does not
contemplate any renewal. It is an insurance for one year, and
one year only ; and, upon the principle acted upon by the Court
of Appeal in Carpenter v. Canadian Railway Accident Insur-
ance Co. (1909), 18 O.L.R. 388, the contract evidenced by the
renewal receipt is to be regarded as a new insurance, depending
entirely upon a new agreement between the parties. I do not
think that this is at all in conflict w T ith Liverpool and London
and Globe Insurance Co. v. Agricultural Savings and Loan Co.
(1903), 33 S.C.R. 94, where the decision of the Court of Appeal,
Agricultural Savings and Loan Co. v. Liverpool and London and
Globe Insurance Co. (1901), 3 O.L.R. 127, is reversed.

This new contract is, according to the terms of the receipt, a
contract of insurance for a year “according to the tenor of
policy 565996.”

Referring in the first place to the statute itself, the intention
of the Legislature appears to be plain. The contract to insure
is to stand, but it is to be purged of all terms and conditions
modifying the primary contract in the interest of the company

XXVI.]

ONTARIO LAW REPORTS.

and to the prejudice of the insured, unless the terms are set
out upon the face or back of the instrument evidencing the con-
tract. “Instrument” must be understood, in the light of the
Interpretation Act, as meaning “instrument or instruments;”
and the contention of the company is, that the reference in the
receipt to the original policy constitutes it one of the instru-
ments forming or evidencing the contract, and that its terms
are, therefore, binding; and, in the alternative, that the refer-
ence to the former policy is a sufficient compliance with the Act.
The contention of the assured is, that the Legislature intended
to render insufficient a mere reference to some other document
in which the terms of the insurance are to .be found, and to re-
quire the whole contract to appear on the face of the single
sealed or written instrument which forms or evidences the
contract. This argument is much fortified by sub-clauses (a)
and (b), which expressly permit the application and the rules
of friendly societies to be embodied in the contract by reference.

The cases I find to be very difficult. In Venner v. Sun Life
Insurance Co. (1890), 17 S.C.R. 394, the statute under con-
sideration was the Dominion Insurance Act, R.S.C. 1886, ch.
124, sec. 27. This provided that “no condition, stipulation or
proviso modifying or impairing the effect of any policy . . .

shall be good or valid unless such condition, stipulation or pro-
viso is set out in full on the face or back of the policy. ’ ’ There
the policy had been issued “upon the representations, agree-
ments and stipulations” contained in the application; and the
Supreme Court held that the section in question could not be
relied upon as an answer to a claim that the policy was void
by reason of misrepresentation contained in the application.

It is difficult to see how it could be thought that the section
had anything to do with the question whether the contract had
been obtained by fraud. Mr. Justice Taschereau, in the course
of his judgment, does not pass upon this point, but says that,
if applicable, the stipulation in the application “is in express
terms referred to in the body of the policy, so that the appellant
cannot invoke against the company section 27.” None of the
other Judges referred to the point: Mr. Justice Gwynne giving
reasons ; the other three Judges simply agreeing that the appeal
should be dismissed.

6 — XXVI. O.L.B.

Middleton, J.
1912

Youlden

London

Guarantee

and

Accident

Co.

ONTARIO LAW REPORTS.

[VOL.

Middleton, J.

1912

Youlden

London

Guarantee

and

Accident

Co.

In Jordan v. Provincial Provident Institution (1898), 28
S.C.R. 554, the appeal was from Ontario, and the statute under
consideration was the Ontario Act, 55 Viet. ch. 39, sec. 33. This
statute modified in some important respects the earlier Ontario
Act, 52 Viet. ch. 32, sec. 4 (which was in practically the same
words as the Dominion statute) and is identical with the present
Ontario Act (sub-sec. (5) having been added in 1895 by 58 Viet,
ch. 34, sec. 5, sub-sec. 10). The policy was in substantially the
same form as that under consideration in the Venner case. It
was issued in consideration of the statements contained in the
application. There was material misstatement. The judgment
of the Supreme Court is given by Sedgewiek, J., who says: “We
consider that the Ontario Insurance Act of 1892, section 33, sub-
section 1, was complied with in the present case, following, as
we do, the decision in the case of Venner v. Sun Life Insurance
Co:’ 0

This precludes my independent consideration of the question,
as I think it is an authoritative statement that, notwithstanding
the provision of the Act, the section in question is complied with
when the document relied upon is referred to and sufficiently
identified in the contract. Had the Supreme Court not seen fit
to place its judgment upon this ground, I should have thought
it apparent from the terms of the statute that the application
might be identified by reference, and that this express pro-
vision found in clause ( b ) went far to indicate that this was
intended to be an exception to the general rule.

The question again rose in Hay v. Employers’ Liability As-
surance Corporation (1905), 6 O.W.R. 459, where Mr. Justice
Osier says: “Whatever other construction we might have felt
ourselves at liberty to place upon sec. 144, sub-sec. (1), of the
Ontario Insurance Act, R.S.O. 1897, ch. 203, we are now bound
by the decisions of the Supreme Court of Canada ... to
hold that the plaintiffs’ proposal and the statements therein
contained are, by reference thereto in the policy, sufficiently in-
corporated therewith and set out in full therein, within the
meaning and rquirements of the . . . section.” And in

Elgin Loan and Savings Co. v. London Guarantee and Accident
Co. (1906), 11 O.L.R. 330, this statement is adhered to.

XXVI. ]

ONTARIO LAW REPORTS.

I cannot see any ground upon which I should be justified in
attempting to distinguish the case in hand from what is said
in the authorities referred to. These cases, as I have already
pointed out, might have been rested upon the fact that the
application is, by clause (5), excepted from the more general
provision of the section; but the Court has deliberately re-
frained from placing its decisions upon this ground, and has
preferred to adopt a construction of the clause which, I fear, has
had the effect of nullifying the intention of the Legislature. If
I am right in this, it is admitted that the plaintiff’s action
fails; and it is not necessary to consider the other questions
argued.

The action is dismissed without costs.

[IN CHAMBERS.]

Jarrett v. Campbell.

Trial — Action to Establish Will — Judicature Act, sec. 103 — Application for
Order for Trial by Jury — Refusal — Discretion — Leave to Appeal — Prac-
tice .

An action to establish a will, transferred from a 'Surrogate Court to the
High Court, is one within the former exclusive jurisdiction of the Court
of Chancery, within the meaning of sec. 103 of the Judicature Act, R.S.O.
1897, ch. 51; and is, therefore, to be tried without a jury, unless other-
wise ordered.

In the circumstances of this case, a Judge in Chambers refused to make an
order for trial by jury; and another Judge refused leave to appeal to
a Divisional Court.

Review of the legislation and practice.

Re Lewis (1885), 11 P.R. 107, approved and. followed.

Motion by the defendant Campbell for an order directing
that the issues in this action be tried by a jury.

March 15. The motion was heard by Falconbridge, C.J.K.B.,
in Chambers.

R. McKay , K.C., for the defendant Campbell.

E. C. Cattanach, for the plaintiffs.

J. R. Meredith, for the infant defendants.

March 18. Falconbridge, C. J. : — The action concerns the
validity of the will of the late Charles Bugg. The plaintiffs, the
executors named in it, propounded it for probate in the Surro-

Middleton, J.

1912

Youlden

London

Guarantee

AND

Accident

Go.

1912

March 18.
March 25.

ONTARIO LAW REPORTS.

[VOL.

Falconbridge,

C.J.

1912

Jarrett

Campbell

gate Court of the County of York. The defendant Campbell, the
only surviving child and heir-at-law of the deceased, contested
probate, upon the ground that the will was not duly executed,
and that the testator had not testamentary capacity; also upon
the ground that the execution of the will was obtained by the
undue influence of the plaintiffs’ who are not only executrices
but residuary legatees under the will, and who beneficially take
the greater portion of the testator’s estate, which is very large.
The proceedings were transferred from the Surrogate Court to
the High Court, and the order of transfer reserved to any party
the right to apply for a trial with a jury.

In Re Lewis (1885), 11 P.R. 107, Ferguson, J., determined
that a probate action, transferred from a Surrogate Court to
the High Court, was a matter over which the Court of Chancery
had, at the time of the passing of the Judicature Act, exclusive
jurisdiction; this being at that time the criterion upon which
the right to demand a jury by a mere jury notice depended, as
well as the criterion as to the mode of trial pointed out by sec.
45 of the Judicature Act of 1881.

Prior to that statute, Surrogate Court proceedings could be
transferred to the Court of Chancery, and became subject to the
general provisions of the Chancery Act, which contained a pro-
vision authorizing an order directing a trial by jury.

By the section in question, in cases in which the Court of
Chancery had exclusive jurisdiction, “the mode of trial shall
be according to the present practice of the Court of Chancery.”

In the revision of 1887 (R.S.O. 1887, ch. 44, sec. 77) this sec-
tion was recast, and assumed the form in which it is now found,
as sec. 103 of the Judicature Act, R.S.O. 1897, ch. 51, which pro-
vides that “all causes, matters, and issues, over the subject of
which prior to the Administration of Justice Act of 1873, the
Court of Chancery had exclusive jurisdiction, shall be tried
without a jury, unless otherwise ordered.” The change of date
from 1881 to 1873 is in this case immaterial, because the pro-
vision of the Surrogate Courts Act relating to transfer of causes
to the Court of Chancery is found in the Consolidated Statutes
of 1859. >

As is pointed out in Re Lewis, the legislation here and in
England upon this point has proceeded upon widely differing

XXVI.]

ONTARIO LAW REPORTS.

lines. The right of the heir-at-law in England to have the issue
devisavit vel non tried by a jury was long carefully preserved
to him ; but here the result of our legislation is, that primd facie
the action “ shall he tried without a jury,” and the onus is upon
the party seeking to have a jury to shew a case justifying it
being “otherwise ordered.”

In this case everything points to the desirability of a trial
without a jury. There will he many witnesses — it is said some
125 — and as many experts as the law or the trial Judge may
allow to be called. The trial, it is said, will take two weeks. The
circumstances of the case are such as to make it unlikely that
the mind of the jury can be concentrated upon the real issue.
As said in the case already referred to, “the cause can properly
and fitly be disposed of in the ordinary way without the inter-
vention of a jury.”

Motion dismissed — costs in the cause.

Falconbridge,

C.J.

1912

Jarrett

Campbell

The defendant Campbell moved for leave to appeal to a
Divisional Court from the order of Falconbridge, C.J.K.B.

March 22. The motion was heard by Boyd, C., in Chambers.
G. Grant , for the applicant.

I. F. Hellmuth, K.C., for the plaintiffs.

J. R. Meredith, for the infant defendants.

March 25. Boyd, C. : — This application seeks to unsettle the
practice and course of procedure by going back to one of the
earliest statutes of old Upper Canada. Yet, even in England,
the statute law of which was, so far as applicable to the condi-
tion of this Province, adopted in 1791, the course of practice was
not to regard the claim of the heir-at-law to have an issue tried
before a jury as an absolute right, but one to be dealt with
according to the circumstances. Thus in Man v. Ricketts (1844),
7 Beav. 93, 101, Lord Langdale declined to direct such an issue,
the will having been otherwise sufficiently proved as against the
heir. Indeed, the real reason why the trial at law, and therefore
by a jury, was granted in England, was because of “the frail
and imperfect manner of examining into facts” then possessed
bv tho. Court of Chancery. The words are those nf Lord Erskine

ONTARIO LAW REPORTS.

Boyd, 0.

1912

Jarrett

Campbell

[VOL.

in White v. Wilson (1806), 13 Yes. 87, at p. 91. This case is cited
by Ferguson, J., and the wrong volume given in Re Leivis, 11
P.R. 107, at p. 108 ; and it is now not to be questioned that such a
reason does not exist in Ontario, where all Courts alike have the
fullest power and the most searching method of investigating
facts. The old course in England was to file a bill for the purpose
of establishing the will as against the heir with regard to realty.
Then there would be a hearing of such evidence as was admis-
sible in equity practice; and, if a sufficient primd facie case of
proof was made out, then an issue would be directed ( devisavit
vel non) in order to establish conclusively as against the heir the
fact of a valid will made by a competent testator. See the course
pursued in Waters v. Waters (1848), 2 DeGr. & Sm. 591, 599.

The English practice grew out of historical reasons. Until
the Probate Court Act of 1857, 20 & 21 Viet. eh. 77, there was
no jurisdiction to admit a will of land to probate. The only
mode of testing the validity of such will w^as by an action of
ejectment between the heir and the devisee. But in our practice
the probate of will includes realty and personalty: realty is
becoming more and more assimilated to personalty: with us the
unique distinction of heir-at-law never obtained, for all children
shared equally. All the reasons which necessitated (almost) a
jury trial as against the heir-at-law in England, never existed
here; and our practice is settled, whether the contest be in the
lower Court or upon the removal of the contention to the High
Court, that the trial of fact by jury is a matter for the sound
discretion of the Court or a Judge: R.S.O. 1897, ch. 59, sec. 22*
and sec. 35. These sections are conclusive as against any vested
and absolute right of the heir to insist on a trial by jury.

The practice was well settled by a very careful Judge in 1885,
in Re Leivis , 11 P.R. 107 ; and I see no reason to doubt the
correctness of the order of the Chief Justice of the King’s Bench,
or to doubt that he wisely exercised his discretion, having re-
gard to the issues raised and their magnitude and the complexity
likely to arise in trying to sever the methods of trial in investi-
gating the facts of this controversy.

I disallow leave to appeal; and costs of the executors and
other beneficiaries opposing should be paid out of the estate.

*See now 10 Edw. VII. ch. 31, sec. 28.

XXVI.]

ONTARIO LAW REPORTS.

[BOYD, C.]

Adams v. Gourlay.

Will — Construction — Conditional Gift — Revocation upon N on- fulfilment of

Condition — Distribution among other Legatees Named in Will — Legatee

Named in Codicil — Status of, to Question Fulfilment of Condition — *

Substantial Performance of Condition — Cy-pres Doctrine.

A codicil forms part of the will or testamentary instrument, but not neces-
sarily to all intents and purposes.

The testator, by his will, gave the bulk of his property to his two nieces,
but upon a certain condition, to be fulfilled in his lifetime, and which
was not made known to them until after his death; and, in the event of
their not fulfilling the condition, he revoked the devises and bequests
to them, and directed that “their shares be distributed equally among
the other legatees named in this my will.” A year and a half later,
he executed a codicil, by which he gave a small legacy to the plaintiff,
who was not named or referred to in the will. The codicil did not in
terms say that it was made part of the will, but it confirmed the will
and gave other pecuniary legacies to persons not named in the will.
After the testator’s death, the executor, deeming that the condition had
been fulfilled, turned over to the two nieces the property bequeathed
to them. The plaintiff, on her own behalf and not representing any
other possible claimants, sued the executor and the two nieces for an
account and a share of the property transferred to the nieces, alleging
that they had not fulfilled the condition, and that she (the plaintiff)
was entitled as one of the other legatees named in the will : —

Held, that the plaintiff, being a legatee only by virtue of the codicil, was
not one of the legatees contemplated in the will, and had no locus
standi to question the conduct of the executor in making over the prop-
erty to the two nieces.

Eenwood v. Overend (1815), 1 Mer. 23, and Hall v. Severne (1839), 9 Sim.
515, followed.

Semble, that there had been a substantial performance of the condition by
the nieces; and, by the application of the cy-pres doctrine, the condition
had been practically satisfied.

Action for construction of the will of George Baker; for an
accounting by the defendant the executor; to recover from the
defendants the Misses Baker the moneys and property of the
estate transferred by them to the executor; and for administra-
tion.

March 20. The action was tried before Boyd, C., without
a jury, at Stratford.

R. S. Robertson, for the plaintiff.

F. H. Thompson , K.C., for the defendants.

March 25. Boyd, C.:— The testator gives the bulk of his
property to his two nieces, who are, with the executor, defendants,
upon this condition: —

“Upon their remaining with me as my housekeepers at all
times (unless I consent to one or both of them going out) during

1912

March 25.

ONTARIO LAW REPORTS.

Boyd, 0.

1912

Adams

Gourlay

[VOL.

the remainder of my life and during that time rendering me faith-
ful service and giving me all necessary and proper attention and
all proper care and nursing in case of illness or in case I should
become feeble and should they fail in those respects or any of them
I hereby absolutely revoke the said devise and bequests to them
and direct that in lieu thereof my executors shall pay to my said
niece Sarah Elizabeth Baker the sum of two hundred dollars only
and I direct that their shares be distributed equally among the
other legatees named in this my will.”

“And I hereby further declare notwithstanding anything
hereinbefore contained that it is not my will or intention that it
shall be compulsory for both of my said nieces to remain with me
at all times but that it will be sufficient if one of them is with me
when I am in my usual health and that both of them shall be pres-
ent when I require the services of both and so notify them.”

The will was made in February, 1907; a codicil was added
giving the legacy of $100 to the plaintiff under the name of Ellen
Hamilton — she not being named or referred to in the will — codicil
dated in September, 1908. The testator died on the 27th Sep-
tember, 1910. His wife died in 1906, and he had no children.
I am not clear as to his age, but I think it was about eighty.
The nieces did not know of the terms of the condition or of any-
thing that was in the will — nor did any one, according to the
evidence, but the solicitor who drew it (who was not called as a
witness). The nieces, however, lived with him and cared for him,
as it turned out, according to the terms of the condition, however
strictly construed, from before the date of the will and just upon
the death of his wife, until the 19th July, 1909, when a change in
his health and habits became very apparent, which had begun
about the date the physician was summoned during February,
1909; then, at his instance, more competent assistance was called
in, under the supervision of the nieces, and this state of domestic
affairs continued until his death.

Then first became known the condition expressed in the will;
and, on a review of and with knowledge of all that was detailed
before me in evidence, the executor paid over or turned over to
the two beneficiaries the property now claimed (in part) by the
plaintiff. The plaintiff, as she testified, sues on her own behalf

XXVI.]

ONTARIO LAW REPORTS.

solely, and is not joined by and does not represent any other
possible claimants under the will.

I expressed my opinion as the the effect of the evidence at the
close of the argument, but reserved judgment generally. I now
deal first with the right of the plaintiff to maintain this action.

In Henwood v. Overend (1815), 1 Mer. 23, the residue was to
be divided “ amongst the several legatees in proportion to the
several sums of money bequeathed to them by this my will.”
By a codicil specified “to be added to and taken as part of” the
will, other legacies were given to other legatees. Sir William
Grant, M.R., held that the legatees under the codicil were excluded
from sharing in the residue; and that the words “by this my will”
were not less strong than the words “hereby” and “hereinafter,”
which were so restrictively construed by the Lord Chancellor in
Bonner v. Bonner (1807), 13 Yes. 379.

Sir William Grant’s decision was approved and followed by
Shadwell, V.-C., in Hall v. Severne (1839), 9 Sim. 515, where the
residue was to be proportionably divided among “the herein-
before mentioned legatees;” and in a codicil, which he declared
to be a part of his will, he gave other legacies to other persons
and also additional legacies to those who were legatees in the will.
It was held that none of the legatees under the codicil were to
share in the residue in respect of their legacies under the will.
The Vice-Chancellor declined to follow the case of Sherer v.
Bishop (1792), 4 Bro. C.C. 55, in which Lord Commissioner Eyre
said that a codicil was a part of the testamentary disposition,
though not part of the instrument, and on this ground that the
residue should be divided among legatees (described as “such
relations only as are mentioned in this my will ”) and other legatees,
also being relations, named in the codicil; the two other Lords
Commissioners, Ashhurst and Wilson, hesitating a good deal at
this extension of the word “will” and doubting the construction.
Shadwell, V.-C., favoured the opinion of the hesitating and
doubting Judges, and characterised that of the Chief Commissioner
as “a very extraordinary one.” The concurrence of opinion in
two such Judges as Grant and Shadwell, both skilled in questions
of construction, may well be followed without hesitation. The
words used in this will are identical with those used in the case
in 1 Mer.

Boyd, C.

1912

Adams

Gourlay

ONTARIO LAW REPORTS.

Boyd, C.

1912

Adams

Gourlay

[vol.

Looking at this will per se, I would not think the testator’s
meaning to be doubtful. He directs that the property intended
to be given to his two nieces, which, upon their default in certain
conditions, is to be revoked, shall then be distributed “ equally
among the other legatees named in this my will.” The codicil
does not in terms say that it is made part of the will, as in the Severne
case, but it confirms the will and gives other pecuniary legacies
to persons not named in the will. The obvious meaning, to my
mind, is, that the testator named in the will those who are to
share equally in the revoked property, and does not intend that
the legatees first named in the codicil shall come in to diminish
what is given to those named in the will.

It was said in argument that Hall v. Severne has been dis-
credited. On the contrary, I find it has not been impeached, but
rather upheld. It was followed in Early v. Benbow (1846), 2
Coll. 342, and both cases were referred to as authorities by Farwell,
J., in Re Sealy (1901), 85 L.T.R. 451; and was held to be rightly
decided by Sullivan, M.R., in Donnellan v. O'Neill (1871), Ir. R.
5 Eq. 523, 532, on the ground that the shares of the residue were
fixed by the will, and so were the persons to take them, and there
was nothing in the codicil to alter this express gift. And, in
addition to all this, it was followed as late as 1907 by a Divisional
Court in Re Miles (1907), 14 O.L.R. 241, a decision binding upon
me.

There isrno doubt of the general principle that a codicil forms
part of the will or testamentary instrument, but not necessarily
to all intents and purposes. As said by Lord Hardwicke, C., in
Fuller v. Hooper (1750), 2 Yes. Sr. 242, “the testament . . . .

may be made at different times and different circumstances, and
therefore there may be a different intention at making one and
the other.”

I hold, therefore, that the present plaintiff, being a legatee
only by virtue of the codicil signed and made on the 9th September,
1908, is not one of the legatees contemplated in the will made on
the 7th February, 1907. This being so, and as the evidence is
that she sues only for herself and in her own behalf, she has no
locus standi to question the conduct of the executor in paying over
the property devised to the two nieces, who take under the terms
of the will.

XXVI.]

ONTARIO LAW REPORTS.

This lessens the importance of the main question as to whether
these nieces are entitled to take the property. My impression
at the trial was, that, upon the facts, there had been a sufficient
compliance with the conditions requisite to their success. I refer
to my comments on the evidence at the close of the trial, as
follows : —

I do not propose to dispose finally of this case at present;
there are legal questions that arise; but upon the evidence I will
just say a few words that strike me now.

There are two parts in this will to be regarded. The benefits
to the two Baker nieces are conditional “upon their remaining
with me as my housekeepers at all times” — I leave out the par-
enthesis — “during the remainder of my life and during that time
rendering me faithful service and giving me all necessary and
proper attention and all proper care and nursing in case of illness
or in case I should become feeble.” Then there is the clause put
in, “upon their remaining with me as my housekeepers at all
times (unless I consent to one or both of them going out).” There
is a provision there that there may be a remission of the continuous
attendance of one of them, or even of both of them — going out
from his house, and therefore ceasing to be his housekeepers; and
then at the end, which is to be taken as the strongest part of the
will, if there is any ambiguity, there is his declaration, “I hereby
further declare notwithstanding anything hereinbefore contained
that it is not my will or intention that it shall be compulsory for
both of my said nieces to remain with me at all times but that it
will be sufficient if one of them is with me when I am in my usual
health and that both of them shall be present when I require the
services of both and so notify them.”

Of course they did not know this. This was entirely in the
testator’s breast and in the office of his solicitor, locked up in the
will; and neither of these women knew anything about this.
Only the testator himself knew what was in it. He knew what
was in the will; and, whether or not they were requested, they
acted on the terms of this will. It was not compulsory for both
of his nieces to remain with him at all times. “It will be sufficient
if one is with me when I am in my usual health.” Now, one or
other of them was with him continuously, under the strictest
terms of the will, while he was in his usual health. I think his

Boyd, C.

1912

Adams

Gourlay

ONTARIO LAW REPORTS.

[vol.

Boyd, C.

1912

Adams

Gourlay

usual health failed, his usual condition failed, at the time the doc-
tor was called in, in February, 1909, and he degenerated more or
less from that time until Mrs. Mutton was called in to take
possession as housekeeper in July, 1909. They remained with
him during his usual health and down to the time, three days
after the time in fact, that Mrs. Mutton came in, and then they
were superseded by her as housekeepers; but, I think, the evidence
amply justifies the conclusion that — whatever his state of mind
may have been from a legal point of view, as to his legal capacity
and so on — he had certainly lucid intervals, he was able to under-
stand matters; and, although you could not fully intrust to him
the disposal of business, he understood what was going on. I
cannot fail to reach that conclusion from the whole of the evidence,
the evidence given by Mrs. Mutton herself, as well as the evidence
of others. Mrs. Mutton had reasons for knowing, and she tells
us that on one occasion, when he was making some objection to
signing a cheque, they told him it was to pay Mrs. Mutton, and
he signed it. That corroborates what the two women themselves
say, that he was aware that they were collecting his income, his
rents and so on, and that they were transacting his financial
business, that they were paying Mrs. Mutton as housekeeper,
and that the niece who had been housekeeper under wages had
ceased to receive wages some time before, and that Mrs. Mutton
was acting in her stead and she so continued. He was aware
of that change; and, I think, it would not be at all unfair to treat
that transaction, his knowledge of it, and his consent to it, and
his agreeing that Mrs. Mutton should be paid, as an outcome
of this parenthetical clause, “unless I consent to one or both of
them going out.” They both did go out. They necessarily
went out, I think, because of the condition of the man himself,
and he in effect consented to their doing so, and consented to
the other housekeeper coming and being appointed in their stead.
That is the equitable construction to give to the will, of which
I think it is susceptible, and I am inclined to think that the evi-
dence would justify it.

Turning to the evidence, it is quite plain from what the doctor
said that it was unsafe for those women to stay there any longer.
He advised a change. He did so with scientific knowledge and
accuracy and judgment required in dealing with such cases. He

XXVI.]

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did not know anything about the will. He was not actuated one
way or the other, but for the best interests of the man himself
and of these two women that were there; and he says that it was
impossible for those women with any degree of propriety to stay
there. It was indelicate and inadvisable; and it was much
better in every way that this mature woman, a married woman,
should come in; and she proved an admirable success, but they
retained the control of affairs ; they did not abandon the .old man
or leave him to the tender mercy of casual strangers, as was said.
They were there once or sometimes twice a week. They attended
to the operation of shaving him, a confidential performance,
and were brought close to him, in touch with him in a most familiar
way, so that he was with them all along at intervals, although he
knew that they were not there continuously, and in his saner
moments he may have appreciated the reason of their not being
there; but he was content with the arrangement; he made no
objection; he went on and consented to Mrs. Mutton being
housekeeper and to their coming in in that way from time to time
all through. Now, he knew what the conditions were in his will,
and he made no objection to this state of affairs as indicating
that they were not carrying out what he intended they should do in
order to enjoy this legacy. I rather think, upon the fair con-
struction of the evidence, that there was a sufficient performance
within the meaning of the terms of the will, having regard to the
flexibility of it and the consent which he might give to both of
them being absent. I do not finally pass upon this until I look
at the cases, and on the other point as well as this. It may be
that the other point is fatal. However that is, I will reserve
judgment on the whole case.

True it is that ignorance by the beneficiary of a condition
annexed to a gift by will does not protect the devisee from the
consequences of not complying therewith: Astley v. Earl of Essex
(1874), L.R. 18 Eq. 290.

There is a good deal to be said in favour of the view presented
by the defendants’ counsel that the conduct of the testator, his
words and acts in regard to his nieces and in their presence, were
so fraught with sexual aberration as to render the requirement
of residence with him one contra bonos mores, within the meaning
of Brown v. Peck (1758), 1 Eden 140. This, of course, does not

Boyd, C.

1912

Adams

Gotjrlay

ONTARIO LAW REPORTS.

Boyd, C.

1912

Adams

Gourlay

1912

March 27.

[VOL.

appear upon the face of the condition, and requires to be established
(as it was established) by the evidence. This conduct would
absolve them from continuous residence and would justify their
having him cared for, as they did, by a married woman and her
husband, who were able to control the testator; so that, in equity,
the testator himself worked a discharge of the conditions.

I still think that there was a substantial performance of the
condition by the nieces; and, if so, by the application of the
cy-pres doctrine, the condition has been practically satisfied. In
Williams on Executors, assent is given to the law found in Story’s
Equity Jurisprudence, that “where a literal compliance with the
condition becomes impossible from unavoidable circumstances,
and without any fault of the party, it is sufficient that it is com-
plied with as nearly as it practically can be, or as it is technically
called ‘cy-pres:’” Williams, 10th ed., p. 1013, note (e).

But, in view of my decision upon the status of the plaintiff,
I do not further pursue the inquiry on this branch of the case.

The action should stand dismissed; but I would give no costs
against the plaintiff unless she appeals. Costs out of the estate
to the defendants in any event.

[BOYD, C.]

Huegli v. Pauli.

Church — Property Rights — Religious Institutions Act, 36 Viet. ch. 135,
secs. 7, 19 — Construction — Deed of Conveyance of Church Site to Trus-
tees — Special Trusts not Affected by Statute — Erection of Meeting-
house — Subsequent Abandonment — Removal to New Building < — Effect
as to Continuity of Beneficiary — Sale of Old Site and Building — Reso-
lutions of Congregation — Breach of Trust — Status of Plaintiffs to Com-
plain — Former Members of Congregation — Status of Minister of New
Congregation — “Duly Authorised ” — Congregational System of Church
Government — Class Action — Amendment — Remedy for Breaches of
Trust.

In 1874, a congregation of the Evangelical Lutheran denomination pur-
chased land in the town of Stratford as a site for a house of public
worship, and the land was conveyed to trustees for the congregation.
The recitals in the conveyance shewed that it was obtained under the
powers conferred upon religious societies by the Act then in force respect-
ing the property of religious institutions, 36 Viet. ch. 135(0.), which
provides (sec. 19, now sec. 23 of R.S.O. 1897, ch. 307) that “in every
case the special trusts or powers of trustees contained in any . . .

conveyance . . . shall not be affected or varied by any of the pro-
visions of this Act.” Section 7 of the Act gives power to sell the land

XXVI.

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when it becomes unnecessary to be held for the religious use of the con-
gregation, and it is deemed advantageous to sell. The recitals shewed
also that a then existing religious society or congregation of Evangelical
Lutherans had occasion for the land purchased and conveyed as a site
for a house of public worship, and had appointed three persons (the
trustees to whom the conveyance was made) to hold in perpetual suc-
cession, under the name of “The Trustees of the Stratford Evangelical
Lutheran Church,” for the use of the said society and upon the trusts
thereinafter set forth. There were two special trusts: first, that the
premises should be forever thereafter held for the use of the members of
an Evangelical Lutheran Church; and, second, “that the trustees shall
at all times hereafter permit any minister, he being duly authorised by
the said Evangelical Lutheran Church to conduct the worship thereof,
to officiate in the church existing or which may hereafter be built on the
said lot according to the ritual ... of the said church, and shall
also apply the rents and profits derived from any portion of the said lot
or the buildings erected thereon towards the maintenance of public
worship in the said church or meeting-house, according to the rules . . .
or towards the repairs or improvement of the said property, and to no
other purpose whatsoever.” The conveyance also provided that when
the church for which the “trust was created shall lose its visibility and
cease to exist,” the control of the property should pass over to and vest
in the nearest Evangelical Lutheran 'Church of the same faith and
order. The original society built and took possession of a meeting-house
on the land so conveyed, and occupied the place for religious uses until
December, 1908; when the congregation moved into a new building upon
another site, it having been previously resolved (practically unanimously)
by the congregation, at meetings held for the purpose, that a new lot
should be bought and a new building put up, and that the old lot and
building should be sold. After vacating the old site, the trustees, acting
on the direction of the congregation, rented the old building, and applied
the surplus of rent, after paying taxes and insurance, for the benefit of
the congregation and of the new site. The trustees also, in like man-
ner, sold four feet of the land, and were offering the rest for sale. In
February, 1911, the plaintiffs and others began a movement for the
establishment of a new congregation of Evangelical Lutherans in Strat-
ford. One of the plaintiffs was a dissident member of the original
society, the only one who had objected to the purchase of the new site
and the sale of the old; and another (the plaintiff H.) was a minister
of the denomination in good standing, who had been called to Stratford
for the purpose of organising the new movement. He became the pastor
of a new society, worshipping in a hall ; and this newly organised body,
containing a few members of the original society, applied for leave to
enter upon the old site; and, that being refused, in February, 1912,
brought this action against the trustees of the new site and building
(the successors of the original grantees), claiming and practically ad-
mitted to be the legal owners of the old site, for a mandatory order
upon the defendants to enforce the re-opening of the old building for
public worship, and to allow the plaintiff H. to conduct public worship
therein, and for a declaration to have the trusts of the deed carried into
execution, and to have the sale stayed and the rents applied under the
trust to the old site: — -

Held, that the situation, provided for in the deed, of the church for which
the trust was created losing its vitality and ceasing to exist, had not
arisen: the vacating of the old site was not equivalent to the cesser of
existence of the beneficiary.

Held, also, that the effect of sec. 19 of the Act (now sec. 23) is to forbid
the nullification of the special trusts of the deed; and, by the terms of
the deed, the land was acquired for the possessory use and benefit of the
congregation, and was to be maintained and improved in perpetuity;
the trust inhered in the title, and so passed to the successive trustees
indefinitely in futuro — not to be interrupted by a sale out and out.

1912

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Pauli

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1912

Huegli

Pauli

[VOL.

Held, however, that, as the organisation of the church described in the
deed was upon the Independent or Congregational system, the view of
the majority prevailed; the organised body had power to change the
place at which its services should be conducted and to change its name;
the resolutions to vacate the old site and to sell or rent it were matters
of congregational competence, and were conclusive as against the plain-
tiffs. The identity of the beneficiary church was established in favour
of the body represented by the defendants; and such of the plaintiffs
and those whom they represented as were members of the original
body, had, by leaving it, ceased to be a part of it, and had no right as
former members to claim any part of the trust property.

Held, also, that the plaintiff H., although in good standing as a minister
of the general body, was not one “duly authorised by the said Evan-
gelical Lutheran Church to conduct the worship thereof:” the context
shewed that the source of authority was to be sought, not in the de-
nomination at large, but in the particular body or church representing
the original congregation.

Held, also, that no amendment enabling the plaintiffs to sue on behalf of
others who sympathised with them — which was essential in order that
no incongruity in the class represented might arise — would better the
cause of action; the legal title was in the defendants, and no breach of
trust had arisen in regard to which the plaintiffs had a right or an in-
terest to complain.

Semble, that the defendants’ breaches of trust might be investigated by the
intervention of the Attorney-General and a competent relator.

Action for a mandatory injunction requiring the defend-
ants, the trustees of an Evangelical Lutheran Church in the town
of Stratford, to reopen for public worship their disused church-
edifice, and to allow the plaintiff Huegli to conduct services
therein; for a declaration that the plaintiffs were entitled to
have the trusts of the deed of the land upon which the building
stood carried into execution; for an injunction restraining the

defendants from leasing or selling the building or the land and

from using or allowing it to be used for purposes other than
those declared in the trust deed; and for other relief.

March 20 and 21. The action was tried before Boyd, C.,
without a jury, at Stratford.

F. H. Thompson , K.C., for the plaintiffs.

R. S. Robertson, for the defendants.

March 27. Boyd, C. : — This is a church case, not involving
questions of doctrine, but only those of property. All the liti-
gants are of the Evangelical Lutheran denomination, holding
the doctrines set forth in the unaltered Augsburg Confession,
and both parties claim conflicting rights under one and the same
deed of trust.

The plaintiffs’ statement of case appears simple; but, upon

XXVI. ]

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the development of the facts at the trial, questions arise of
difficult and complicated character which have not been con-
sidered by our Courts. I do not purpose to deal with more than
are necessary to determine this action. Three plaintiffs are on
the record, but at the hearing they asked leave to sue ‘ ‘ on behalf
of others.” An initial difficulty arises as to “who are the
others?” That remains as yet undefined. The defendants are
alleged to be and are the trustees of the legal estate in the
church property in question, and breaches of trust are com-
plained of. No doubt, the rule is well settled that a member of
the society may sue on behalf of himself and all the members of
that society to prevent a breach of trust ; or it may be that, if
he stands alone, he may sue in his own name for an injunction ;
but it must appear that he has a legal interest to intervene. So
I pass for the present from the question of parties and the
locus standi of the plaintiffs.

The trust property was acquired in July, 1874, by convey-
ance in fee simple from Alexander Grant, of Stratford, for an
expressed consideration of $200. The conveyance is made to
three persons appointed to be trustees (under the statute then
in force, 36 Yict. ch. 135(0.), respecting the property of religi-
ous institutions), for the purposes therein set forth. The recitals
shew that a then existing religious society or congregation of
Evangelical Lutherans had occasion for the land purchased and
conveyed as a site for a house of public worship, and had ap-
pointed three persons to hold in perpetual succession, under the
name of “The Trustees of the Stratford Evangelical Lutheran
Church,” for the use of the said society and upon the trusts
thereinafter set forth.

There are two “special trusts” (to use the phrase of the
deed) : first, that the premises shall be forever hereafter held
for the use of the members of an Evangelical Lutheran Church,
which shall be exclusively composed of persons holding the
doctrines of the said Augsburg Confession; and, second, “that
the trustees shall at all times hereafter permit any minister, he
being duly authorised by the said Evangelical Lutheran Church
to conduct the worship thereof, to officiate in the church existing
or which may hereafter be built on the said lot according to

Boyd, c.

1912

Huegli

Pauli

1 — XXVI. O.L.R.

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Boyd, C,

1912

Huegli

Pauli

— — ^ uing. [VOL.

the ritual ... of the said Church, and shall also apply the
rents and profits derived from any portion of the said lot or
the buildings erected thereon towards the maintenance of public
worship in the said church or meeting-house according to the
rules ... or towards the repairs or improvement of the
said property, and to no other purpose whatsoever. ’ ’

It is to be noted that the word “ church ” is used in two
senses in different parts of the conveyance,; at times referring to
the religious society, and again to the particular meeting-house
on the premises.

The recitals shew that the conveyance was obtained under
the powers conferred upon religious societies by the provincial
statute then in force, 36 Viet. ch. 135, sec. 19, which provides
that “in every case the special trusts or powers of trustees
contained in any deed, conveyance, or other instrument, shall
not be affected or varied by any of the provisions of this Act.”
That clause is carried into the latest revision of the same Act
(R.S.O. 1897, ch. 307, sec. 23). This Act gives power to sell the
land when it becomes unnecessary to be held for the religious
use of the congregation, and it is deemed advantageous to sell,
etc. : sec. 7 of 36 Viet. ch. 135.

This original society built and took possession of a meeting-
house on the said land, and occupied the place for religious uses
down to the 13th December, 1908, when the premises were
vacated under the following circumstances.

The congregation was growing from year to year, and it
became a question whether the old building should be repaired
and extended or another site should be procured and a new
building erected.

By the record in the church minutes it was, on the 17th
December, 1906, resolved unanimously that a new church
should be erected. There was some fluctuation of opinions and
of resolutions as to the locus ; but finally it was moved and
carried at a meeting of the congregation held on the 24th Janu-
ary, 1908, that a new lot should be bought, and on the 28th
August of the same year that the old lot should be sold. This
vote also appears to be practically unanimous, only one person
(who is one of the plaintiffs, Allstadt) voting “nay.”

The new building being put up on the new lot, the congrega-

XXVI.]

ONTARIO LAW REPORTS.

tion as a whole took possession of the new building, in Erie
street, on the 13th December, 1908, when the new meeting-
house was formally opened. There does not appear to have been
what is called a “split” in the society. Some members may
have been reluctant or inert, but only the one who voted “nav M
upon the question of sale is in evidence as being actively dis-
sident. The pastor of the society that moved into the new build-
ing says, “Practically the whole congregation went with me.”
He names the plaintiff Allstadt as the only exception. Another
plaintiff, Racey, was active in support of the new movement,
and voted in favour of it at the meeting.

After vacating the old site, the trustees, acting on the
direction of the congregation, rented the building thereon, and
applied the surplus of rent, after paying taxes and insurance,
for the benefit of the congregation and of the new site. The
trustees also, in like manner, sold four feet of the land, and are
now offering the rest for sale. The trustees of the Erie street
lot (now defendants) claim to be the legal owners of the old
site; and this is not in effect questioned by the plaintiffs in
the present case. The object of the suit is to restrain the sale
and to get a right of entrance to the old building (which is in
Cambria street) in order to make use of it for religious services,
in the interest of a body of people represented by the plain-
tiffs. This movement in regard to the new body began in Febru-
ary, 1911, by the forwarding of a petition with twelve signa-
tures to the plaintiff Huegli, who is an Evangelical Lutheran
clergyman of the Synod of Missouri, and in good standing as a
member of that iSynod, inviting him to take up ministerial work
in Stratford. He came, and a hall was rented On Downey
street, and there he began to organise a congregation, and was
joined by the plaintiffs Racey and Allstadt and two or three
others who had been members of the congregation worshipping
in Cambria street, and also by some outsiders, aggregating in all
about twenty members — the whole number of present adherents
in Downey street hall being about one hundred.

To go back now to an analysis of the petitioners and their
standing in the Cambria street church at the time it was re-
solved to build a new meeting-house on another site, we find

Boyd, C.

1912

Huegli

Pauli

100

ONTARIO LAW REPORTS.

Boyd, C.

1912

Huegli

Pauli

[VOL.

that five of these were not members of the old church ; one, Hem-
bruch, was not in good standing since 1906, and had no right to
vote in the old church; and of the remaining six, Homan at-
tended the Erie street meetings for a while; Schroeder sub-
scribed for the building of the new church, and became liable on
the bond for its debt, and also attended at Erie street for a
while; Wolf subscribed towards the new building and went over
with the majority; Redding is now a member of the Erie street
church and in good standing (i.e., making his payments, etc.) ;
Racey went over with the rest to Erie street church, and, as
has been stated, was an active advocate of the change ; and the
last of the twelve, Allstadt, is the only one who has opposed
and stood aloof from the new movement.

The situation as it has been developed is not provided for
in the four corners of the deed of trust. Only two conditions
are there dealt with: (1) when all is going on in due course by
the occupation and religious use of the trust property by the
congregation of the Stratford Evangelical Lutheran Church; and
(2) when the church for which the “ trust was created shall lose
its visibility and cease to exist” — then the control of the pro-
perty is to pass over to and vest in the nearest Evangelical
Lutheran Church of the same faith and order.

The action is framed on the theory that this second situa-
tion has arisen — by assuming that the vacating of the old site
is equivalent to the cesser of existence of the beneficiary. This
proposition cannot, it seems to me, be sustained. The church
in possession under the deed of trust has, for sufficient reasons,
decided no longer to remain on the trust property ; and the ques-
tion as to what is to be done with that property cannot be solved
by reference to this latter provision in the deed of trust.

The newly organised body, containing a few members of
the former church society, has applied for leave to enter upon
the old site, by notice about the 12th April, 1911; and, failing
to get satisfaction, this action is brought on the 1st February,
1912, seeking a mandatory order on the defendants to enforce
the reopening of the church and to allow the plaintiff Huegli to
conduct public worship therein, and for a declaration to have
the trusts of the deed carried into execution, and to have the
sale stayed and the rents applied under the trust to the old site.

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101

By the terms of the deed, the land is held on the special
trusts that the same shall be forever held and enjoyed for the
use of the members of an Evangelical Lutheran Church, and
that the rents, etc., shall be applied to repairs and improve-
ment of the said property, and to no other purpose whatsoever.

The plaintiffs’ broad contention is, that the lands cannot be
sold and that the rents (if any) cannot be diverted from the
perpetual purpose of repairing and improving the trust pro-
perty. They claim to represent some of the beneficiaries, being
members of the original congregation for whose use and benefit
the trust was created, and that the majority cannot by any vote
or action overrule and extinguish their rights and claims.

The broad contention of the defence is, that there is no pri-
vate right of action; that the beneficiary is the society or con-
gregation, and not any individuals of it ; and that the society as
a whole is represented by the Erie street church. As to the
sale and the application of the rents, they invoke the benefit of
the statute referred to in the deed; and say that, even if the
rents were misapplied, it is a grievance to be complained of
by the Attorney-General, and not by the plaintiffs.

This Act, no doubt, provides for the sale and leasing of church
lands when it becomes unnecessary to retain them for religious
use, upon the consent being obtained of a majority of the
members present at a meeting duly called for that purpose ;
and, so far as all necessary preliminaries are concerned, this
place may well be sold or leased if the Act applies. But the
plaintiffs rely on sec. 19 of the Act (sec. 23 of the present Act),
which provides that in every case the special trusts or powers of
trustees contained in any deed shall not be affected or varied
by any of the provisions of the Act. In this deed we find ex-
pressed as “ special trusts:” (1) that the land shall be forever
hereafter held and enjoyed for the use of the members of an
Evangelical Lutheran Church; and (2) that the rents and profits
derived from any portion of the said parcel of ground or the
building erected thereon shall be applied towards the mainten-
ance of public worship in the said church or meeting-house, to-
wards the repairs and improvement of the said property, and
for no other purpose whatsoever. This last special trust is

Boyd, C,

1912

Huegli

V .

Pauli

102

Boyd, C.

1912

Huegli

Pauli

ONTARIO LAW REPORTS. [vol.

peculiarly emphatic in being impressed on the very place and
the building (the meeting-house) thereon.

Unless I can nullify these special trusts, the land cannot
be sold or the rents diverted to another place. And, as I read
the statute, it forbids the nullification of these special trusts.
The effect of this statute has not been considered; I believe, by
the Courts in the aspect now presented. The aim of the Legis-
lature appears to be to give a right of alienation to a religious
body holding lands by trustees capable of perpetual succession.
The statute leaves out cases of special trust and deals with
lands held by the corporation on the general trust or obligation
of using the property for the purposes contemplated at its
creation.

Apart from special restraining trusts, when the body
outgrows its building, and the majority decide that it has become
necessary and advantageous to dispose of the property with a
view of removing to a more convenient situation, then the
statute promotes the benefit of the body by sanctioning such a
course ; and a sale so had, which is a conversion of the present
property, cannot be regarded as a diversion or a breach of trust.

But, if words are found in the conveyance which forbid a
change of site, the statute does not mean to violate that term of
the contract, but lets the parties abide by the bargain they
have made when the property was acquired. By the terms of
this deed, the land is bought for the possessory use and benefit
of the particular local church as a congregation, and is to be
maintained and improved in perpetuity. The rents and profits,
if any, are to be invested in the meeting-house and otherwise
on the particular site ; the congregation is tied down to that spot
as their place of worship so long as the congregation exists. In
brief, the trust inheres in the title, and so passes to the succes-
sive trustees indefinitely in future > — not to be interrupted by a
sale out and out. This is my reading of the statute and of this
trust deed — but the result does not enure to the benefit of the
plaintiffs.

Now the present trustees, the defendants, hold this land
in trust for the particular church so long as it exists and can be
traced and identified. The Stratford Evangelical Lutheran

XXVI.]

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103

Church of the deed had power to change the place at which its
services should be conducted and also to change its name to that
of the “Erie Street Church.” These changes of local habitation
and name are matters of ecclesiastical concern and cognizance,
with which the Courts have nothing to do. The organisation
of this particular church is based on the Independent or Con-
gregational system, in which the voice of the majority of the
members prevails. The minority, however small or large, is out-
voted by the action of the majority, and the resolutions to vacate
the old place, to sell or rent it, and to move into a new building
on a new site, are all matters of congregational competence, and
are conclusively settled as against the plaintiffs. The identity of
the beneficiary church is established in favour of the body repre-
sented by the trustees, the defendants. The few who went out
and banded themselves together with others in a new organisa-
tion, worshipping in the Downey street hall, are an offshoot
from the old body, but thereby have ceased to be a part of it,
and can have no right as once members of the original body to
claim any part of the property vested in *the trustees for that
original body: see per Dickerson, J., in Newburgh Associate Re-
formed Church Trustees v. Princeton Theological Seminary
Trustees (1837), 4 N.J. Eq. 77, and Pine Hill Lutheran Con-
gregation Trustees v. St. Michael’s Evangelical Church of Pine
Hill (1864), 48 Pa. St. 20.

That appears to be the situation as regards the religious or
ecclesiastical aspect of this controversy. None of the plaintiffs is
a corporator or beneficiary because not a member of the old
church. But that leaves untouched the consequences of this
congregational act of removal in a legal point of view, as affected
by the legal breaches of trust begun in part and in process of
consummation by the sale of the land.

It may be well now to deal with the plaintiff Huegli, who is
an outsider (so to speak) and stands alone in his claim. Assum-
ing the non-existence of the church, the plaintiffs invoke that
part of the deed which provides that, if the church loses its
visibility, the land forthwith vests in the trustees of the nearest
Evangelical Lutheran Church, which in this case happens to be
the Erie Street Church, and the defendants the trustees. If

Boyd, 0.

1912

Huegli

Pauli

104

Boyd, C.

1912

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ONTARIO LAW REPORTS. [vol.

so vested with the land in this character, the deed provides that
the trustees shall be under obligation to open the church for
regular or occasional services to any minister or missionary of
the Evangelical Lutheran denomination holding the doctrinal
views of the Augsburg Confession aforesaid. This requirement
is fulfilled by Mr. Huegli, who is in good standing as a member
of the Synod of Missouri, and is presented by the newly organ-
ised church on Downey street as a fit and proper person to be
inducted for the time being in connection with the services to
be resumed on the site owned by the defendants. The differ-
ence between this part of the trust and that which relates to
the regular services held when the building is occupied by the
original church is, that in the latter case the clergyman who has
the right of entree is one “duly authorised by the said Evange-
lical Lutheran Church to conduct the worship thereof. ” The
context shews that the source of authority is to be sought, not in
the denomination at large, extending over the continent, but in
the particular body or church representing the original con-
gregation. There being no lack of existence or of visibility of
this latter body, the plaintiff Huegli is a clergyman not
competent to officiate, whose claim to conduct the services in
the old building may well be vetoed by the trustees. So that,
to put it shortly, the plaintiffs, who complain of a breach of
trust by the trustees, propose to enforce against them an occu-
pancy of the site which would be a further breach of trust.
Upon the ecclesiastical side, the old church body worshipping
close by in Erie street regards this move as an attempt to estab-
lish a rival church in their proximity for no sufficient cause.

No amendment enabling the plaintiffs to sue on behalf of
others who sympathise with them — and this is essential in order
that no incongruity in the class represented may arise — no such
amendment would better the cause of action. The legal title is
in the defendants, and no breach of trust has arisen in regard to
which the plaintiffs had a right or an interest to complain. The
breaches of trust must be investigated by another method, pro-
bably by the intervention of the Attorney-General and a com-
petent relator; but on that I do not decide. The only possible
way of reparation to cure the breaches would be for the Zion

XXVI.]

ONTARIO LAW REPORTS.

105

Church to retrace their steps, resume possession, and re-estab-
lish worship on the old site ; but I suppose it is now too late for
that remedy. It may be that the real solution of the difficulty is
to resort to the Legislature and procure special legislation,
which may quiet, if not satisfy, all concerned.

The action must be dismissed; but costs will not be given,
considering that the question discussed is new and bare of prece-
dent, and that the conduct of the defendants has not been ac-
cording to law, however honestly undertaken.

[TEETZEL, J.]

Kennedy v. Kennedy.

Will — Construction — Gift for Maintenance of Residence — Perpetuity — In-
testacy — Trust — Discretion of Trustees — Bona Fides — Power to Sell
Lands — Conveyance Free from Charge of Annuity — Charge on Proceeds
of Sale.

Any gift, not being charitable, the object of which is to tie up property for
an indefinite time, is void.

The testator devised his dwelling-house and lands and the chattels therein
and thereon (except a number specifically bequeathed) to his son, the
defendant J. H. K., but subject to certain provisions as to rights of occu-
pation, etc., in favour of two granddaughters. He made other bequests;
and then gave the residue of his estate to his executors and trustees “to
be used and employed by them in their discretion or in the discretion of
a majority of them in so far as it may go to the maintenance and keep-
ing up my house and premises herein bequeathed to my son J. H. K.
with full power and authority to them to make sales of any real estate
upon such terms and conditions and otherwise as may be expedient and
to execute all deeds documents and other papers necessary for the sale
of same and to make title thereto to any purchaser thereof and the pro-
ceeds of such sales to devote as in their discretion or in the discretion
of a majority of them may seem meet and necessary to keep up and
maintain my said residence in the manner in which it has been hereto-
fore kept and maintained and if for any reason it should be necessary
that the said residence should be sold and disposed of I direct upon any
such sale being completed that the residuary estate then remaining shall
be divided in equal proportions among the several pecuniary legatees
under this my will:”' —

Held, that the gift of the residue was void as creating or tending to create
a perpetuity; and that there was an intestacy as to the whole of the resi-
due.

Thomson v. Shakespear (1860), 1 De G. F. & J. 399, Came v. Long (1860),
2 De G. F. & J. 75, Yeap Cheah Neo v. Ong Cheng Neo (1875), L.R. 6
P.C. 381, and Rickard v. Rohson (1862), 31 Beav. 244, applied and fol-
lowed.

Semble, that, although the trust was in its nature imperative, and the
amount to be expended was left in the discretion of the trustees, they
could not at once appropriate the whole fund, regardless of the amount
thereof and the amount necessary to be expended, for the benefit of the
owner of the dwelling-house, the defendant J. H. K. ; the trust must be
executed in good faith.

8 — XXVI. O.L.R.

Boyd, C.

1912

Huegli

Pauli

1912

March 28.

106

ONTARIO LAW REPORTS.

1912

Kennedy

15 .

Kennedy.

[you

Held, also, that the wide power of sale vested in the trustees enabled them
to make title to lands embraced in the gift of the residue free from a
charge of an annuity thereon in favour of the plaintiff; but the proceeds
of sale would be subject to the charge.

The plaintiff, one of the next of kin of David Kennedy, de-
ceased, brought this action to obtain a construction of the will of
the deceased, and for a declaration that the gift therein to the
trustees to keep up and maintain the residence of the testator
was void as tending to create a perpetuity.

March 5. The action was tried before Teetzel, J., without
a jury, at Toronto.

J. Bicknell, K.C., and W. A. Baird, for the plaintiff and the
defendants Robert Kennedy and Joseph H. Kennedy.

E. D. Armour, K.C., and A. D. Armour, for the defendant
James H. Kennedy.

W. M. Douglas, K.C., for the defendants the Suydam Realty
Company and Henry Suydam.

T. P. Galt, K.C., A. J. Bussell Snow, K.C., and W. A. Proud-
foot, for the other defendants.

March 28. Teetzel, J. : — The principal question for deter-
mination is, whether or not a provision contained in the will of
David Kennedy, deceased, is good, or void as creating or tending
to create a perpetuity.

The clause containing the provision in question reads as
follows : —

‘ ‘ The rest residue and remainder of my estate both real and
personal I give devise and bequeath to my executor executrices
and trustees aforesaid to be used and employed by them in their
discretion or in the discretion of a majority of them in so far
as it may go to the maintenance and keeping up my house and
premises herein bequeathed to my son James Harold Kennedy
with full power and authority to them to makes sales of any real
estate upon such terms and conditions and otherwise as may
be expedient and to execute all deeds documents and other
papers necessary for the sale of same and to make title thereto
to any purchaser thereof and the proceeds of such sales to de-
vote as in their discretion or in the discretion of a majority of
them may seem meet and necessary to keep up and maintain my

XXVI.]

ONTARIO LAW REPORTS.

107

said residence in the manner in which it has been heretofore
kept and maintained and if for any reason it should be necessary
that the said residence should be sold and disposed of I direct
upon any such sale being completed that the residuary estate
then remaining shall be divided in equal proportions among the
several pecuniary legatees under this my will. ’ ’

This clause and other parts of the will have been the subject
of much judicial consideration during the last three years, be-
ginning with Kennedy v. Kennedy (1909), 13 O.W.R. 984, and
in Kennedy v. Kennedy (1911), 24 O.L.R. 183, and Foxwell v.
Kennedy (1911), 24 O.L.R. 189; the last pronouncement being
an unreported judgment of the Chief Justice of the Common
Pleas, in January last, in Foxwell v. Kennedy, on the counter-
claim of the defendants the Suydam Realty Company and Henry
Suydam, decreeing in their favour specific performance of a
contract for the sale of a portion of the residuary estate in con-
sideration of $97,000.*

By the judgment in Kennedy v. Kennedy, reported in 24
O.L.R. 183, it was held by Mr. Justice Latchford that the pro-
vision in the above clause in favour of the pecuniary legatees was
void, on the ground that it created a perpetuity. This judgment
was affirmed by a Divisional Court (p. 189 of the same volume) ;
and a judgment of mine in Foxwell v. Kennedy, formally adopt-
ing the judgment of my brother Latchford, was affirmed by a
Divisional Court (p. 198 of the same volume).

The plaintiff is one of the next of kin of the testator, and in
this action claims, not only that the gift of what may remain
of the residuary estate, but also that the gift in its entirety to
the trustees to keep up and maintain the residence of the testa-
tor, is void as tending to create a perpetuity.

The testator gives his dwelling-house and premises in the
city of Toronto, together with the chattels therein or thereon
at the time of his decease, except a number specifically be-
queathed, to the defendant James Harold Kennedy, “but sub-
ject nevertheless to the provisions hereinafter made for Gertrude
Maude Foxwell and Annie Maud Hamilton.”

*An appeal from this judgment was dismissed by a Divisional Court
on the 6th May 1912. See 3 O.W.K. 1225.

Teetzel, J.

1912

Kennedy

Kennedy.

108

ONTARIO LAW REPORTS.

Teetzel, J.

1912

Kennedy

Kennedy.

[VOL.

The will contains provisions in favour of each of these
ladies, to the effect that each is given a bed-room suite in a
specified room in the house, together with the contents and fur-
nishings thereof, with a right to live in said residence as a home
as long as she remains unmarried, and to occupy said room with
free and full ingress, egress, and regress thereto and therefrom,
with all other privileges, rights, conditions, and conveniences
necessary to the full enjoyment thereof, but on no condition is
she to be looked upon to do or to be compelled to do any work or
have any household duties or responsibilities except to look
after her own apartment, and a right to remove the chattels
when she leaves the premises; and his son James Harold Ken-
nedy is to supply her with a key to the front door, with all neces-
sary maintenance and board, all of which is expressly made a
charge upon his residence and premises.

I think it is plain from all the provisions of the will with
reference to his residence that the testator’s scheme was to have
the same maintained as a family residence for these two young
ladies as long as they lived and for his son James Harold Ken-
nedy and his family and descendants or whomsoever James
Harold Kennedy might will or otherwise give the said residence
to, and that as to such residence it should, until sold and disposed
of, be kept up and maintained by the trustees and those succeed-
ing them in the trust in the manner in which it had been kept up
and maintained by him.

This being, as I think, the scheme which the testator had
in his mind, the question for consideration is, whether, in making
the provision for carrying out that scheme, he has not infringed
the rule of law against perpetuities.

As the result of the best consideration I have been able to
give to the numerous authorities cited in argument and others,
I am of opinion that the gift in question is void as creating or
tending to create a perpetuity. I am unable to distinguish this
case in principle from such cases as Thomson v. Shakespear
(1860), 1 DeG. P. & J. 399; Came v. Long (1860), 2 DeG. F. &
J. 75; Yeap Cheah Neo v. Ong Cheng Neo (1875), L.R. 6 P.C.
381; and Rickard v. Robson (1862), 31 Beav. 244.

■

XXVI.]

ONTARIO LAW REPORTS.

109

In Thomson v. Shakespear, the provision of the will analog-
ous to the provision in question was, that the testator gave his
trustees £2,500 “to he laid out by them as they shall think fit,
with the concurrence of the trustees of Shakspeare’s house,
already sanctioned by me, in forming a museum at Shakspeare ’s
house, in Stratford, and for such other purposes as my said
trustees in their discretion shall think fit and desirable for the
purpose of giving effect to my wishes. ’ 9 In that case, as in this,
the money was taken out of the estate, and was directed to he
spent for the maintenance of the premises, and the period over
which the expenditure should extend was likewise indefinite, and,
not being for a charity, was held to be void as in violation of the
rule against perpetuities.

In Came v. Long, the testator gave his mansion house and
premises, with the appurtenances thereunto belonging, unto the
trustees for the time being of the Penzance Public Library, to
hold to them and to their successors forever for the use, benefit,
maintenance and support of the said library. The Lord Chan-
cellor in giving judgment in that case said (p. 79) : “My objec-
tion to it is, that it tends to a perpetuity. . . The clear

intention of the testator, as expressed by the will, is, that
this should be a gift in perpetuity to this institution at
Penzance. The gift is to the trustees for the time being of the
society and their successors, to be held by them and their suc-
cessors for ever, they holding it for the use, benefit, mainten-
ance and support of the library. If the devise had been in
favour of the existing members of the society, and they had been
at liberty to dispose of the property as they might think fit, then
it might, I think, have been a lawful disposition and not tending
to a perpetuity. But looking to the language of the rules of this
society, it is clear that the library was intended to be a perpetual
institution, and the testator must be presumed to have known
what the regulations were. By one of these it is provided, that
the society is not to be broken up so long as ten members remain.
The devise, therefore, is for the benefit of a subsisting society,
and one which is intended to subsist so long as ten members
remain, and the property comprised in the devise is therefore
to be taken out of commerce and to become inalienable, not
for a life or lives in being and twenty-one years afterwards, but

Teetzel, J.

1912

Kennedy

Kennedy.

110

ONTARIO LAW REPORTS.

Teetzel, J.

1912

Kennedy

Kennedy.

[VOL.

for so long as ten members of the society shall remain. This
seems to me a purpose which the law will not sanction as tend-
ing to a perpetuity.”

Now, in this case, the testator in effect says that his trustees
shall spend such sums out of his residuary estate as they may
deem necessary to keep up and maintain his residence until
it is sold and disposed of ; and, while such keeping up and main-
tenance is for the benefit of James Harold Kennedy and those
who may succeed him as devisees and donees, they have no con-
trol over or power of disposition of the residue not appropriated
by the trustees to keeping up and maintaining the residence.
Nor have they the power, upon selling the residence, to dispose
of any part of the fund set aside for its maintenance.

In the case reported in L.R. 6 P.C. 381, a gift “of the upper
storey of four specific houses or shops, to be occupied by the
several members and descendants of K.S.C. and L.K.W. as
already proposed,” that is, as the context shewed, as a family
house for the use of two separate families, was held to be void
for uncertainty, and as denoting an intention to create a
perpetuity.

The analogy in this case is not, of course, the giving of this
residence for the occupation of the son James Harold and the
two ladies, but for its perpetual maintenance or until “it should
be necessary that the said residence should be sold and disposed
of.”

In Rickard v. Robson , it was held that a bequest of money,
the interest of which was to be applied in keeping up the tombs
of the testator and of his family, is void as a perpetuity. It is
difficult to draw a distinction between a provision for keeping
up a tomb as a resting place of the deceased members of the
family and a provision for the indefinite keeping up of a resi-
dence as a habitation for the living members of the family. See
also Hoare v. Osborne (1866), L.K. 1 Eq. 585; Fowler v. Fowler
(1864), 33 Beav. 616.

In In re Gassiot (1901), 70 L.J.N.S. Oh. 242, a bequest of
£4,000 to the Vintners Company on condition that they accept a
bequest of a portrait with certain obligations, and enjoining the
company out of the income of the £4,000 to keep in due and
proper repair the portrait, cleaning and regilding its frame not

XXVI.]

ONTARIO LAW REPORTS.

Ill

less than once in every four years, the surplus income to be
applied for the benefit of individuals answering a particular
description, etc., was held to be void as infringing the rule against
perpetuities.

See also In re Dutton (1878),. 4 Ex. D. 54.

I think the general proposition of law to be drawn from the
above cases is, that any gift, not being charitable, the object of
which is to tie up property for an indefinite time, is void.

It seems to me that there can be no question in this case as
to the indefiniteness of the time during which the residuary
estate was to be tied up, inasmuch as many generations of owners
may continue to occupy the residence before the happening of
the event upon which further expenditures are to cease, i.e., when
it shall “be necessary that the said residence should be sold and
disposed of.”

Nor do I think that, upon a fair interpretation of the testa-
tor’s language, it can be held that the residue, except such as,
in the honest discretion of the trustees, it is necessary to expend
for up-keep and maintenance of the residence according to the
standard fixed by the testator, is not tied up and taken from
commerce, within the meaning of the authorities. Neither the
owners of the residence nor the trustees have any right to dis-
pose of the fund for any other purpose. The trustees are bound
to hold the whole fund for the purpose of the up-keep and
maintenance until the happening of the event when, according to
the testator’s wish, the residue was to be distributed among his
pecuniary legatees; and I cannot conceive how the fact that,
because it has been held that the testator’s wish in that regard
has been defeated by reason of his language contravening the
law, any advantage therefrom is to accrue to the owner of the
residence.

I am unable to yield to the argument by Mr. Armour, that,
because the trust is in its nature imperative, and the amount to
be expended is left to the discretion of the trustees, they can at
once appropriate the whole fund, regardless of the amount
thereof or of the necessities for expenditures, for the benefit of
the present owner, as, by his deed poll (exhibit 4), the defend-
ant James H. Kennedy, the owner and sole trustee, has attempted
to do. Like any other trust, it must be executed in good faith ;

Teetzel, J.

1912

Kennedy

Kennedy,

112

Teetzel, J.

1912

Kennedy

Kennedy.

ONTARIO LAW REPORTS. [vol.

and the Court will exercise its control to prevent a dishonest
exercise of discretion. Whether or not the defendant James II.
Kennedy, in the exercise of his discretion as evidenced by the
deed poll, has acted honestly, I am unable, upon the evidence,
to say; because the actual amount of the fund in his hands or
the necessities for up-keep and maintenance were not dis-
closed in evidence before me; so that, if my judgment
as to the total invalidity of the gift is not maintained, the
plaintiff and other next of kin should be at liberty, in another
action, if so advised, to contest the good faith of James H. Ken-
nedy in the exercise of the discretion as evidenced by the deed
poll.

The whole estate was charged with the payment of an annuity
of $400 to the plaintiff, and he claims that the lands embraced
in the residuary gift cannot be sold except subject to that charge.
In view of the wide power of sale vested in the trustees, it is, I
think, perfectly plain that they may make title to the purchaser
free from the charge, but the proceeds will be charged with

At the trial, I dismissed the action as against the defend-
ants Suydam and the Suydam Realty Company, but reserved
the question of costs. I now think that there is no good reason
why the plaintiff should not pay them.

The judgment will therefore be : —

(1) Declaring that the gift of the residue is void as creating
a perpetuity, and that the lands embraced therein may be sold
free from the plaintiff’s annuity; declaring that the proceeds of
the sale are charged therewith; and that, as to the whole resi-
duary gift, there is an intestacy; reserving to the plaintiff and
other next of kin, in the event of it being held that my judgment
is wrong, the right to impeach, in another action, the good faith
of the defendant James H. Kennedy in the exercise of his discre-
tion as evidenced by the deed poll.

(2) That the action be dismissed with costs as against the
defendant Suydam and the Suydam Realty Company.

(3) Except as to those costs, the costs of all parties shall be
paid out of the residuary estate.

XXVI.]

ONTARIO LAW REPORTS.

113

[IN CHAMBERS.]

Re Hutchinson. 1912

Infant — Custody — Habeas Corpus — Right of Father against Maternal March 29.

Grandparents — Welfare of Child — Agreement under Seal — Adoption —

1 Geo. V. eh. 35, sec. 3 — Application of sub-sec. ('2) to Father of Child

■ — Principles of Equity.

Upon an application, on the return of a habeas corpus, by the father of a
child under three years of age, for the delivery of the child to him by the
maternal grandparents: —

Held, upon the evidence, that, apart from agreement, the interests of the
child would be better served by leaving her with the grandparents; the
father having all reasonable access to her.

Held, also, that an instrument signed and sealed by the father, in view of
the mother’s impending death, by which the possession, custody, control,
and care of the child, was placed in the hands of the grandparents, was,
while it stood, a bar to the father’s application; and it was valid in law
under R.S.O. 1897, ch. 340, sec. 2 (now 1 Geo. V. ch. 35, sec. 3).

Re Davis (1909), 18 O.L.R. 384, distinguished.

Quaere, whether a father is included in the words used in sub-sec. (2).

Semble, that, apart from the statute, if the agreement were made by the
father in pursuance of an understanding that the child was to inherit
the property of the grandparents, and if she were brought up by them
under that impression, and if that were supplemented by an actual deed
or will, irrevocable, to such effect, the 'Court, acting on principles of
equity, would not, at the father’s instance, disturb that arrangement.

Held, therefore, in the peculiar circumstances of the case, that the custody
should not be changed.

Ex p. Templer (1847), 2 Saund. & C. 169, followed.

Motion by W. H. Hutchinson, the father of Adah May
Hutchinson, a child of two years, upon the return of a writ of
habeas corpus , for an order for the delivery of the child to him,
by the maternal grandparents, the respondents.

March 26. The motion was heard by Boyd, C., in Chambers.

W. N. Ferguson , K.C., for the applicant.

V. A. Sinclair , for the respondents.

March 29. Boyd, C.: — It is always unsatisfactory to deal
with disputed facts as set forth in conflicting affidavits. There
is a mass of material before me, which I have carefully perused,
and find that there is a cumulation of domestic details on which
the various deponents contradict each other in an embarrassing
manner. Disregarding the smaller discrepancies, I should judge,
despite all the divergent opinions, that there is no danger likely
to arise to the child, whether she stays with her grandparents or
goes to her father, in regard to any tubercular infection. Nor
do I think there is any lack of affection on the part of the father,

114

ONTARIO LAW REPORTS.

[VOL.

Boyd, C.

1912

Hutchinson

though it may be he is not so attractive to the child as her grand-
parents. They have been to all intents in loco parentis to this
young girl since her birth. The parents of the infant lived in
the house and home of the maternal grandparents from the date
of their marriage till the death of the wife on the 7th December,
1911, with a short interval from April to the middle of July,
1911, when the parents occupied another house. But during
these few months the infant was left with the grandparents.
The child was born in August, 1909, and is yet under three years
of age — said to be an active, healthy child, yet easily excited and
needing careful treatment.

I have no manner of doubt that the child cannot be better
placed than to be left with the grandparents; they are well to
do, living in a roomy house, with a large lot, in which the child
can play. The character of the grandparents is beyond reproach,
and they stand particularly well in the opinion of the neighbours
and townsfolk of Tillsonburg. They are devotedly attached to
the child, as is the child to them, and they have really had every-
thing to do with and for the child in its sleeping, clothing, main-
tenance, and personal supervision. The opinion I have formed on
this head was shared in by the father himself in his conversation
with Ernest Tretheway, and by Dr. Reid. It is also the opinion
(for what it is worth) of Mr. and Mrs. Honsberger, who, having
made affidavits to sustain the father’s claim on the 20th March,
explain away their statements in later affidavits made on the 25th
March.

To hand over the child to the father would be in the nature
of an experiment; he is a working man, aged about twenty-six,
with no home at present; he proposes to establish one with the
assistance of an elder sister, who has been for the last six or seven
years working in a cutlery company’s works at Niagara Falls,
New York, and has had experience in looking after children.
Owing to the scarcity of suitable houses in Tillsonburg, it is not
likely that the father can do more than get some rooms where the
child will be in a sense cooped up and with the street for a play-
ground. The contrast between these prospects, even if the
household machinery works smoothly, and the advantages pos-
sessed and now enjoyed by the child, is obvious.

No question of religion enters in to embitter the situation of

XXVI.]

ONTARIO LAW REPORTS.

115

the claimants; and I see no good reason why the father should
not return to the household of the grandparents, as they offered 1912
to allow him to do after the death of the child’s mother. He says Ke '
that he would have done so had they destroyed an agreement Hutchinson
which he signed on the 4th December, 1911. This is an instru-
ment under seal, prepared in view of the mother’s impending death,
so as to place the possession, custody, control, and care of the child
in the hands of the grandparents, and providing that the .father
shall have access to the child at all reasonable hours. This instru-
ment is upheld by the grandparents, but is being attacked in an
action by the father to set it aside, which is now pending. I
must regard this at present as a valid agreement which is binding
on the father. It is not for me, on such material as I have before
me, to anticipate a decision of the Court on this dispute. I have
no doubt that the wishes of the dying wife were that the child
should be left to the care of the grandparents.

The signed and sealed agreement of the 4th December, while
it stands, appears to be a bar to any such application as the
present; and it is valid in law under the statutory provisions in
1 Geo. V. ch. 35, sec. 3 (0.),* taken from the revised statute in
force when the deed was executed. But, apart from this agree-
ment, I think, upon the material placed before me, that the in-
terests of the child will be better subserved by letting her custody
remain in statu quo; the father having all reasonable access to the
child when he so desires; this right of access to be settled by the
Local Master, if the parties cannot agree.

In Re Davis (1909), 18 O.L.R. 384, the head-note reads that
the law of this Province knows nothing of adoption; but the
attention of the Court was not directed to the Act I have cited,
and proceeded on the provisions of the Act relating to neglected

*3. — (1) The father of a child under the age of twenty-one years,
whether horn at the time of the decease of the father or at the time en
ventre sa mere, by deed or by his last will and testament in such manner
and from time to time as he shall think fit, may dispose of the custody and
education of such child while he remains under the age of twenty-one
years or for any lesser time to any person in possession or remainder.

(2) Such disposition shall be good and effectual against every person
claiming the custody or education of such child as guardian in socage or
otherwise.

(3) The person to whom the custody of such child is so committed may
maintain an action against any person who wrongfully takes away or
detains him for the recovery of such child and for damages for such
taking away or detention for the use and benefit of the child, 12 Car. II.
ch. 24, sec. 8; BJ8.0. 1897, ch. 340, sec. 2.

116 ONTARIO LAW REPORTS. [vol.

children, and in particular those that can be called deserted and
1912 abandoned — which does not apply to this child.

Rir It may be that the proper reading of the statute is, that the

Hutchinson declaration that such disposition shall be good and effectual
against all and every person claiming the custody and tuition of
the child, does not include a father, if living. But I do not see
any decided case to that effect. But, apart from the statute,
if the agreement has been made by the father in pursuance of an
understanding that the child was to be the heir to or inheritor of
the property of the grandparents, and has been brought up by
them under that impression, and if that is supplemented by an
actual deed or will, irrevocable, to such effect, the Court, acting
on principles of equity, will not, at the father’s instance, disturb
that arrangement. I refer to the considerations influencing the
Court in such cases as Lyons v. Blenkin (1821), Jac. 245; Roberts
v. Hall (1882), 1 O.R. 388, approved of in Chisholm v. Chisholm
(1908), 40 S.C.R. 115.

Therefore, in the peculiar circumstances of this case, following
Ex p. Templer (1847), 2 Saund. & C. 169, I refuse to change the
• custody.

I do not award costs to either side.

I can only express the earnest desire that the parties may
take thought and act reasonably and considerately on both sides,
so as to preserve harmony in the family and avoid a devastating
litigation in the Courts, which may go far to impoverish the
moneyed litigant, and to embarrass the one who is poorer.

[An appeal from the above decision was heard by a Divisional Court
on the 27th May, 1912. Judgment was reserved.]

XXVI.]

ONTARIO LAW REPORTS.

117

[Falconbridge, C.J.K.B.]

Bethune v. The King.

Succession Duty — Bequest of Share of Income of Fund — “ Legacy by Way of
Annuity ” — Succession Duty Act, 7 Edw. VII. ch. 10, sec. 11(1) — Vol-
untary Payment to Crown by Executors of Will — Death of Legatee —
Right to Recover Part of Sum Paid — Mistake of Fact or Law — Im-
providence.

A bequest in a will of the interest or income of a fund is not a “legacy
given by way of annuity,” within the meaning of sec. 11(1) of the Suc-
cession Duty Act, 7 Edw. VII. ch. 10, but simply a gift of interest or
income.

Where the whole of the succession duty attributable to the share of the
income from a residuary trust fund bequeathed to a daughter of the
testator was paid by his executors to the Treasurer of Ontario, and the
legatee died about a year and a half after the death of the testator,
when only one of the four “equal consecutive annual instalments” men-
tioned in sec. 11(1) would have been paid if the method of payment by
instalments had been adopted: —

Held, that the payment was a voluntary one, not made under a mistake of
fact; and, if made under a mistake of law, no part of the money could
be recovered by the executors from the Crown.

Semble, that the payment was not improvident.

Petition of right presented by the suppliants as executors
and trustees of the will of John Sweetland, deceased.

January 27. The petition was tried before Falconbridge,
C.J.K.B., without a jury, at Ottawa.

F. H. Chrysler, K.C., for the suppliants.

H. D. Gamble, K.C., for the Crown.

March 30. Falconbridge, C.J.: — The petition, after setting
out the will and probate thereof, states that the Solicitor to the
Treasury for Ontario furnished the suppliants a statement shewing
that the total succession duty payable in respect of the legacies
and bequests of the said will amounted to the sum of $8,379.82;
that of this amount the sum of $2,139.80 was attributable to duty
payable in respect of the annuity bequeathed by the will to Caro-

1912

March 30.

118

ONTARIO LAW REPORTS.

Falconbridge,

C.J.

1912

Bethune

The King

[VOL.

line Florence Anderson;* that, in and by sec. 11 of the Succession
Duty Act then in force, the duty payable upon any legacy given
by way of annuity was to be paid in four equal consecutive annual
instalments; and that, in the event of the annuitant dying before
the expiration of the first four years, payment only of the instal-
ments which fell due before the death of the annuitant should be
required.

The suppliants, deeming it advisable to discharge the whole
of the succession duty at once, and obtain a release thereof, paid
to the Treasurer for Ontario a sum of money which included the
duty, amounting in the aggregate to $2,139.80, attributable to
the annuity bequeathed to the said Caroline Florence Anderson.

The said Caroline Florence Anderson departed this life on or
about the 9th day of November, 1908; and, therefore, the suppli-
ants claim that, at the time of her decease, the only amount which
they were legally liable for was the instalment of $534.95 which
became payable on the 5th May, 1908. And the suppliants
claim that they paid to the said Treasurer $1,604.85 in excess of
the legal and proper amount payable.

The Attorney-General for Ontario, on behalf of His Majesty,
objecting that the petition of right discloses no facts giving any '
cause of action to the petitioners against the Crown, says that the
legacy or bequest to the said Caroline Frances Anderson was not
an annuity within the meaning of the Succession Duty Act then
in force; and, therefore, is not affected by that provision of sec. 11,
sub-sec. 1, of said Act, which requires payment only of the in-
stalments falling due before the death of the annuitant; and he

*The testator died on the 5th May, 1907. His will was dated the
10th March, 1906. After certain specific bequests, he created a residuary
trust fund, and directed that his executors and trustees .should stand pos-
sessed thereof upon trust during the respective lives of his daughters,
Selina Florence Geddes, Elizabeth Jane Thompson, and Caroline Florence
Anderson, “to pay the net income derivable from the investment of the
said residuary trust fund . . . unto the said Selina Florence Geddes,

Elizabeth Jane Thompson, and Caroline Florence Anderson,” in certain
proportions specified; “and, upon the death of any of my said daughters,
in trust to pay the share of such deceased daughter in the said net-income
unto the surviving daughters in equal shares, and, upon the death of
any one of such two surviving daughters, in trust to pay the whole of
the said income unto the sole surviving daughter during her lifetime, and,
upon the death of such sole surviving daughter, in trust to divide the
said residuary trust fund between my granddaughter Isabella Shaw,

. . . the children of the said Caroline Florence Anderson, and the

children of my stepson . . . , share and share alike, so that each of such

persons will receive an equal amount.”

XXVI.]

ONTARIO LAW REPORTS.

119

further pleads that, if the legacy in question does come within the
provision of sec. 11, then the amount paid for succession duty
was paid under a mutual mistake of law, and is not recoverable
back.

He further pleads, in the alternative, that, if the petitioners
are entitled to the repayment of the said succession duty as claimed
in the petition, then a further succession took place on the death
of the said Caroline Florence Anderson as to that portion of the
estate from which her claim was derived; and the succession duty
thereon should be ascertained and paid.

Further, in the alternative, he pleads that the commutation
of the succession duty to be paid was compromised upon the con-
sideration of the whole estate, and the different interests therein;
and, if the petitioners are entitled to repayment as asked, then the
whole matter should be re-opened, and a new computation made.

The case rests entirely on the correspondence and on the un-
contradicted evidence of Mr. Bethune.

The money was voluntarily paid in supposed pursuance of
secs. 11 (1) and 12 (5) of the Succession Duty Act then in force
(7 Edw. VII. ch. 10).

Section 11 (1) is, in part, as follows: “ Provided that the
duty chargeable upon any legacy given by way of annuity whether
for life or otherwise shall be paid in four equal consecutive annual
instalments, the first of which shall be paid before the falling due
of the first year’s annuity and each of the three others within the
same period in each of the next succeeding three years. In case
the annuitant dies before the expiration of the said four years
payment only of the instalments which fall due before his death
shall be required.”

Section 12 (5) is as follows: “ Notwithstanding that the duty
may not be payable under this section until the time when the
right of possession or actual enjoyment accrues an executor or
person who has the custody or control of the property, may, with
the consent of the Treasurer, commute the duty which would
or might, but for the commutation, become payable in respect
of such interest in expectancy, for a certain sum to be presently
payable, and for determining that sum the Treasurer shall cause
a present value to be set upon such duty, regard being had to the
contingencies affecting the liability to and the rate and amount

Falconbridge,

O.J.

1912

Bethune

The King

120

ONTARIO LAW REPORTS.

[VOL.

Falconbridge,

C.J.

1912

Bethune

The King

of such duty and interest; and on the receipt of such sum the
Treasurer shall give a certificate of discharge from such duty.”
Both the Solicitor to the Treasury and the suppliants seem to
have assumed that the benefit conferred by the will upon Mrs.
Anderson was a legacy given by way of annuity, within the mean-
ing of sec. 11 (1). The authorities are quite clear that it was not
an annuity. They are set out in the extended notes of argument,
and the effect both of English and American cases is, that the
income or interest of a certain fund is not an annuity, but simply
a gift of interest or income. Among the numerous authorities
cited, I refer particularly to Foley v. Fletcher (1858), 3 H. & N. 769;
Winter v. Mouseley (1819), 2 B. & Aid. 802, at p. 806, where Best,
J., says: “I have . . . always understood the meaning of

an annuity to be where the principal is gone forever, and it is
satisfied by periodical payments.”* See, in the United States,
Booth v. Ammerman (1856), 4 Bradford ((N.Y. Surr.) 129, at p.
133.

If the money, then, was paid under mistake of law, which
Mr. Chrysler seems to disavow, it could not be recovered back.
James, L.J., says, in Rogers v. Ingham (1876), 3 Ch.D. 351, at
p. 355: “I have no doubt that there are some cases which have
been relied on, in which this Court has not adhered strictly to
the rule that a mistake in law is not always incapable of being
remedied in this Court; but relief has never been given in the case
of a simple money demand by one person against another, there
being between those two persons no fiduciary relation whatever,
and no equity to supervene by reason of the conduct of either of
the parties . . .” That is not this case, and it is the Crown

from whom repayment is sought; and the position of the Crown
is, as one might expect, certainly not inferior to that of a
subject. This is very clearly laid down in William Whiteley
Limited v. The King (*1909), 101 L.T.R. 741.

Then it was certainly not paid under a mistake of fact. The
only mistake (if any) was something which related to a future

*The following English cases were cited, in addition to those mentioned
by the learned Chief Justice: Gibson v. Bott (1802), 7 Ves. 89, 96; Bridie
v. Field (1854), 19 Beav. 497; Hedges v. Harpur (1858), 3 De G. &
J. 129; Baker v. Baker (1858), 6 H.L.C. 616; In re Crane, [1908] 1 Ch.
379.

XXVI.]

ONTARIO LAW REPORTS.

121

event, viz., the absolutely unforeseen occurrence of this lady de- Fal T.j* ldge ’
parting this life when she did. 1912

I do not see, therefore, how the suppliants can recover. It is

not a case of hardship; the estate as a whole does not suffer. If Bethune
the money had not been paid in this way, there would have been The King
some other succession; and, some of the reversionary legatees
being strangers, it is probable that, in the result, a larger amount
of duty would have to be paid.

In this view, and considering that it was done to facilitate a
winding-up of the estate, I think that the payment by the ex-
ecutors was not improvident; and probably in the passing of their
accounts this circumstance will be taken into consideration. •

I am of the opinion, therefore, that no case has been proved
giving rise to any cause of action against the Crown; and that the
petition should be dismissed.

It is not a case for costs as between the parties. If I have the
power so to order, I direct that the suppliants be paid their costs,
as between solicitor and client, out of the estate.

[IN THE COURT OF APPEAL.]

Stone v. Canadian Pacific R.W. Co. C. A.

Railway — Injury to Brakesman — Foreign Box Freight Car — Appliances for 1912
Coupling — Dominion Railway Act, secs. 264, 317 — Interchange of “

Tr affic — N eg ligenc e — E vidence — J ury . Apr 1 R4

The plaintiff, who had had experience as a railway brakesman, was acting
as brakesman on a freight train of the defendants, when it became his
duty to effect a coupling between a freight box car, part of the train
referred to, which car (called the Wabash car) did not belong to the de-
fendants, but had been received by them from a foreign railway company
in the ordinary course of interchange of traffic, pursuant to sec. 317 of
the Railway Act, R.S.C. 1906, ch. 37, and another car. The Wabash car
was provided with automatic couplers; but, while it had a ladder at the
side, near the end, it had no ladder on the end, as required by sec. 264
(5) of the Act. When the engine was moving the Wabash car towards
the other car, the plaintiff, observing that the knuckle and coupler were
closed, went down the ladder on the side of' the Wabash car, near the
end which was approaching the other car, with the intention of getting
hold of the coupler-rod to open the knuckle so as to receive the coupler
of the other car. He went to the bottom step, and, with his left foot
resting on it, and holding on to the lowest rung of the ladder with his
left hand, endeavoured to reach round the end of the car to the coupler-
rod. While he was in this position, the moving car passed over a cross-
ing, and the jar caused his foot to slip from the bottom step, and he fell
with his arm under the wheels. In an action for damages for his
injuries : —

9 — XXVI. O.L.E.

122

ONTARIO LAW REPORTS.

C, A.
1912

Stone

Canadian
Pacific
R. W. Co.

[VOL.

Held, that what befell the plaintiff was not due to the absence of a ladder
at the end of the car, nor to the insufficient length oif the coupler-rod;
but to the plaintiff not having taken the proper course, viz., to signal the
engine-driver to stop, and then get down and make the coupling from
the ground, which he could have done; that there was no negligence on
the part of the defendants; and no evidence to sustain such of the find-
ings of the jury as were in favour of the plaintiff.

Per Moss, C.J.O. : — The obligation of sub-sec. (5) of sec. 264 of the Rail-
way Act is confined to cars “of the company;” and the absence of end
ladders on thp Wabash car was not a contravention of the obligation.

The following statement of the facts is taken from the judg-
ment of Moss, C.J.O. : —

This is an appeal by the defendants from a judgment entered
by the Chancellor of Ontario, upon the answers of the jury at the
trial, awarding the plaintiff $6,000 damages for injuries received
while in the defendants’ employment as a brakesman. The plain-
tiff was endeavouring to effect a coupling between two box freight
cars, at or near Bolton Junction, a station on one of the defendants’
lines of railway, and, while doing so, was either shaken off or fell
from a ladder affixed to the side and close to the end of the car
upon which he was riding, and one of the wheels passed over his
right arm, necessitating amputation. The box freight car in
question was not the property of the defendants, but had been
received and was being hauled over their lines under the inter-
change of traffic provisions of the Railway Act. It had been re-
ceived by the defendants at Detroit from the Wabash Railroad
Company on the 14th March, 1911, loaded with merchandise
for various points on the defendants’ lines of railway, and on the
18th March it was in course of return to Detroit, via Toronto
Junction, as part of one of the defendants’ regular way-freight
trains, when the accident happened.

The plaintiff attributes the accident to three causes: (a) the
la der being defective because the lowest step, or the step which
was placed below the bottom of the car, was not joined to the rest
of the ladder, but was separate and attached to the bottom
timbers of the car, and was loose and insecure; (b) there was no
ladder on the end of the car close to where the side ladder was;
and (c) the coupling-rod used for controlling the action of auto-
matic couplers, when about to effect a coupling of cars, did not
extend outward from the couplers to the side of the car, or within
a short distance from it, but was so short as to necessitate the going
in between the cars, or at all events to render it necessary to reach
\€iy far beyond the side of the car in order to get hold of it.

XXVI.

ONTARIO LAW REPORTS.

123

The defendants denied all liability, and witnesses were ex-
amined on both sides. At the conclusion of the plaintiff’s case,
counsel for the defendants moved for judgment on the ground
that no case of negligence had been shewn, but the learned Chan-
cellor declined to withdraw the case from the jury. The motion
was renewed at the conclusion of the whole case and again denied.

The learned Chancellor submitted to the jury a number of
questions which with the answers returned are subjoined, viz . : —

1. Was the car in question owned by the C.P.R. or by another
company? A. Owned by another company.

2. Was the car and its fittings reasonably safe for the employees
of the C.P.R. , in the usual operations of the road? A. We think
not.

3. Was the plaintiff, having regard to all the circumstances, in
his method of arranging the gear for coupling the cars, acting
according to good and proper practice? A. Not having received
circular No. 4, we think he acted to the best of his knowledge.

4. If not, wherein did he err?

5. Was the plaintiff injured in consequence of any defect in the
make-up of the car? A. Yes, in our opinion we think he was.

6. If he was so injured, state everything which you find to be
wrong. A. The car in question lacked the ladder on end of car
and long lever equipment used by C.P.R., in which company he
was employed.

7. Could the plaintiff, by the exercise of reasonable care, have
provided for the coupling of the cars with safety to himself?
A. In our opinion, not under the circumstances.

8. Do you find negligence as to the matters in dispute?

(a) In the C.P.R.?

(b) In the plaintiff?

9. If so, state briefly what was the negligence in each case.

10. If the plaintiff is entitled to damages, state how much. The

jury have agreed on $6,000 for damages for plaintiff.

Upon the answers judgment was entered for the plaintiff for

$ 6 , 000 .

The defendants now appeal, contending that the plaintiff is
not entitled to recover damages against the defendants; that, if
entitled to any judgment, the damages should be limited to the

C. A
1912

Stone

Canadian
Pacific
R. W. Co.

124

ONTARIO LAW REPORTS.

[VOL.

0. A.
1912

Stone

Canadian
Pacific
R. W. Co.

amount recoverable under the Workmen’s Compensation for In-
juries Act; and that, in any event, the damages awarded are
excessive.

January 18 and 19. The appeal was heard by Moss, C.J.O.,
Garrow, Maclaren, Meredith, and Magee, JJ.A.

7. F. Hellmuth, K.C., and Angus MacMurchy, K.C., for the
defendants. The learned trial Judge should have given effect
to the motion for nonsuit at the close of the plaintiff’s case, or at
least upon the whole case he should have told the jury that no
liability had been made out. There was no breach of any statute
by the defendants. Unless the provisions of sec. 264 of the
Railway Act, R.S.C. 1906, ch. 37, apply, there appears to be no
rule against the transport of foreign box freight cars. The car in
question was not in contravention of that section. It was re-
ceived in the ordinary course of the obligation to interchange
traffic, imposed by sec. 317 of the Railway Act, and was properly
inspected. The evidence shewed that the accident was caused,
not by the negligence of the defendants, but by that of the plain-
tiff, and that he was the author of his own injury. His position
on the ladder was not a proper one, and was an unauthorised and a
dangerous one. He should have signalled the engine-driver to
stop, and then got down and made the coupling from the ground.
At any rate, the jury by their answers’ have not directly found
the defendants guilty of negligence, though they have found that
the Wabash car was defective. There was no evidence on which a
jury could reasonably find that the alleged defects pointed to in
the answers to questions 5 and 6 were the proximate cause of the
accident. There was no evidence to justify the answer to ques-
tion 7. There was neither statutory nor common law liability.
In any event the damages are excessive.

A. E. H. Creswicke , K.C., and Christopher C. Robinson , for the
plaintiff. The judgment below should be affirmed. The findings
of the jury which bear upon the questions of negligence and con-
tributory negligence are amply supported by the evidence, and
should not be disturbed. The evidence and findings of the jury
shew clearly that the defendants were guilty of a breach of their
statutory duty under the Railway Act, and that such breach was
the cause of the accident. See sec. 264 (c), and sub-sec. 5; Durant
v. Canadian Pacific R.W. Co. (1909), 13 O.W.R. 316; Scott v.

XXVI. ]

ONTARIO LAW REPORTS.

125

Canadian Pacific R.W. Co. (1909), 19 Man. L.R. 165. In every-
thing but the ladders, the Act deals with the train, the ladders
being dealt with in reference to “cars.” Therefore, the statute
applies to the coupler, whether the cars are foreign or not. In
reference to sec. 256 of the Railway Act, see Atcheson v. Grand
Trunk R. W. Co. (1901), 1 O.L.R. 168, and MacMurchy and
Denison’s Railway Law of Canada, 2nd ed., p. 410. As to secs.
284 and 317, no company is bound to accept cars unless properly
equipped: Richardson v. Great Eastern R.W. Co. (1876), 1 C.P.D.
342. On the question of contributory negligence, we submit
that on a plea of “not guilty by statute” that question is not
open. Doan v. Michigan Central R.W. Co. (1890), 17 A.R. 481,
is not conclusive. The jury have found against contributory
negligence: Canadian Northern R.W. Co. v. Anderson (1911),
45 S.C.R. 355.

Hellmuth, in reply. We are not obliged to plead contributory
negligence.

C. A.
1912

Stone

Canadian
Pacific
R. W. Co.

April 4. Moss, C.J.O. (after setting out the facts as above) : —
Upon all the facts disclosed in evidence, and having regard to the
circumstances under which the plaintiff met with the injury, I
think that, if I had tried the case without a jury, I should have
had no hesitation in holding that the plaintiff had not succeeded
in fastening liability upon the defendants. But, the case having
been submitted to the jury, and their answers to the questions
being now before us, there arise for consideration the questions:
(a) whether there was evidence proper to submit to the jury upon
the questions of negligence on the part of the defendants; and, if
so, (b) whether, upon the answers, judgment should not have been
entered for the defendants.

The plaintiff, a young man twenty-two or twenty-three years
of age, who had been for over five years in the employment of the
Canadian Express Company, but in what capacity does not appear,
though it may be inferred that it was work in connection with
railways, and was subsequently employed by the Grand Trunk
Railway Company as a brakesman for six months, entered the
defendants’ employment as a spare brakesman on the 20th August,
1910, and continued in that capacity, though not engaged all the
time in actual work, until the date of the accident, on the 18th

126

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Stone

Canadian
Pacific
R. W. Co.

Moss, C.J.O.

March, 1911. On that day he was engaged as brakesman on a
freight train with the box freight car in question as one of the cars.
At Bolton Junction it was necessary to detach a car which was to
be left there, and it was cut out by means of a running shunt.
After performing that and some other operations, the next step
was to unite the remainder of the cars, which were to go on to
Toronto Junction. The car in question — called the Wabash car —
was to couple with a car some distance from it on the line. The
plaintiff, as his duty required, went upon the roof to signal the
engineer to back down to the other car. When the engine was
moving the Wabash car down towards the other car, the plaintiff,
according to his testimony, observed that the coupler on it was
closed — that is, that the knuckle was not in a position to effect
a coupling with the Wabash car unless the knuckle or its coupler,
which was also closed, was opened.

In order to open this knuckle, the plaintiff went down the ladder
on the side of the Wabash car, near the end which was approach-
ing the other car, with the intention of getting hold of the lever
or coupler-rod by which the knuckle was opened or closed, and
by lifting it thereby open the knuckle so as to receive the coupler
of the other car. He went to the bottom step, and, with his left
foot resting on it, and holding on to the lowest rung of the ladder
with his left hand, and with his right foot hanging down and
swinging in the air, he endeavoured to reach around the end of the
car to the lever or coupler-rod. This lever was connected with
the top of the coupler, with the rod projecting towards the side
of the car on which the plaintiff was. While he was in this position,
the car, moving at the rate of about seven miles an hour, passed
over a crossing of two tracks, and the jar caused his foot to slip
from the bottom step, and he fell with his arm under the wheels. In
his evidence he said that the lever-rod projected only some fifteen
or sixteen inches from the coupler, which was about four feet from
the side of the car, so that the end was about thirty-two or thirty-
three inches from the side of the car where he was. He further
said that the bottom step was about eleven inches in width, and
was loosely and insecurely fastened to the bottom timber of the
car, besides not being under the ladder but to one side of it, and
that the side which was the furthest from the end of the car. In
all these respects the testimony adduced by the defendants amply

XXVI.]

ONTARIO LAW REPORTS.

127

and satisfactorily displaced the plaintiff’s contentions. But, as
the case stood at the end of the plaintiff’s case, the learned Chan-
cellor could not have withdrawn it from the jury if the defendants’
negligence rested upon proof of these facts. It was admitted that
the Wabash car had not ladders on the ends, as required by sec.
264 (5) of the Railway Act. The plaintiff, in examination in
chief, stated that, had there been a ladder at the end of the car,
he would have gone down it, and endeavoured to make the coup-
ling. But on cross-examination he admitted that it was not good
railway practice to go down between the ends of two cars to make
a coupling when the car was in motion — but, he said, “you see it
done every day.” It is manifest that such a practice is not only
dangerous but is directly opposed to the policy of the law as de-
clared by sec. 264 (c) of the Act. He also suggested that, if the
ladder had been at the end, he might have saved himself from fall-
ing, by catching it; bu,t it is difficult to suppose that he could
have seriously believed that that was one of the purposes for which
a ladder is required on each end of a car. It was not, however,
proved or admitted during the plaintiff’s case that the car was not
the property of the defendants. And, assuming it to have been
the defendants’ property, there were the questions whether it
was fitted with couplers and ladders as required by sec. 264, and
whether the failure to provide them was the cause of the accident,
or whether it was due to the plaintiff’s own want of care or failure
to observe the usual and proper modes of making the coupling.
The plaintiff admitted that the proper course would have been
to signal the engine-driver to stop, and then get down and make the
coupling from the ground, which he could have done. He excused
himself by saying that he was on the fireman’s side of the car,
and that the engine-driver was not looking, and so he (the plain-
tiff) could not give any signal.

Upon the whole, although scanty, there was enough at the
close of the plaintiff’s case to justify the refusal to enter judgment
for the defendants. But at the close of the whole case, when it had
been proved, and indeed admitted, that the car was not the de-
fendants’ property, but was owned by the Wabash or some other
company, other questions arose as to the liability of the defend-
ants for the failure of this car to comply with all the requirements
of sec. 264, applicable to couplers and ladders on box freighters.

0. A.
1912

Stone

Canadian
Pacific
R. W. Co.

Moss, C.J.O.

128

ONTARIO LAW REPORTS.

[VOL.

0. A.
1912

Stone

Canadian
Pacific
R. W. Co.

Moss, C.J.O.

The car had been received in the ordinary course of the obligation
to interchange traffic, imposed by sec. 317 of the Railway Act.
It had been inspected in due course and passed in accordance
with the ordinary practice, by inspectors whose competency was
not questioned. Many hundreds of box freight cars without
ladders on each end are received and passed daily, entering Canada
from the United States. It is shewn that there is no rule, statutory
or otherwise, requiring that there shall be ladders on the ends as
well as on the sides of box freight cars used on railways operated
in the United States. The car was provided with automatic
couplers, but the complaint is as to the length of the lever, or
coupling-rod. There is no express provision in the Railway Act
prescribing the length of the lever, but the testimony for the de-
fendants shewed that the end of the lever on the car extended to
within fifteen or sixteen inches of the side, instead of thirty-two
of thirty-three inches, as .the plaintiff stated. The modern
Canadian lever is made to extend out to the side, or to within at
least eight inches; but cars from the United States, with the end
of the lever fifteen or sixteen inches from the side, are admitted
and passed in the usual and ordinary course of inspection. Unless
the provisions of sec. 264 apply, there appears to be no statutory
or other rule against the transport of foreign box freight cars,
although they do not comply in every respect with the Railway
Act.

Section 264 (1) enacts that “every company shall provide
and cause to be used on all trains modern efficient apparatus,
appliances and means, ...(c) to securely couple and
connect the cars composing the train, and to attach the engine
to such train, with couplers which couple automatically by im-
pact, and which can be uncoupled without the necessity of men
going in between the ends of the cars.” Assuming the expression
“and cause to be used” to comprehend foreign cars in transport
over the defendants 7 lines, the car in question was not open to
objection for any defect in the above-mentioned respects.

Sub-section (5) enacts that “all box freight cars of the company
shall, for the security of railway employees, be equipped with,
— (a) outside ladders, on two of the diagonally opposite ends and
sides of each car, projecting below the frame of the car, with one
step or rung of each ladder below the frame, the ladders being

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placed close to the ends and sides to which they are attached.”
The car in question had not ladders on the ends, but it was not
a car “of the company.” There is a distinction drawn between
the couplers to be used on all trains, and the equipment of box
freight cars with ladders. The obligation with regard to the latter
is confined to cars of the company. The car was, therefore, not
in contravention of the sub-section. Even if the contrary were
the case, it is clear that their absence in no way contributed to
the accident which befell the plaintiff. I think that, upon the
whole case, the jury should have been told that no case appeared
upon which they could reasonably find that the defendants were
negligent, and that no case of liability had been made out; and
that the action should have been dismissed.

C. A.
1912

Stone

Canadian
Pacific
R. W. Co.

Moss, C.J.O.

Assuming, however, that it was proper to submit the case
to the jury, is the plaintiff entitled to judgment upon the answers
returned to the questions? It is to be observed, in the first place,
that the j ury failed to return answers to the very pointed and ma-
terial question on the head of negligence contained in No. 8.
But they answer the very general question No. 2, “Was the car
and its fittings reasonably safe for the employees of the C.P.R.
in the usual operations of the road?” which is not directly pointed
at the alleged defects leading to the injury, and a negative answer
to which is not a finding of negligence on the part of the de-
fendants.

The answers to questions 4 and 5 bear more directly on the
question. They attribute the plaintiff’s injury to the fact that
the car in question lacked the ladder on the end of the car and the
long lever attachment used by the defendants in their cars. But
there is no evidence upon which a jury could reasonably find that
these alleged defects were the proximate cause of the accident.
The plaintiff was endeavouring by using the side ladder not as a
means of descending the ladder to the ground and there effecting
the coupling, as he admits was the proper course, but for the pur-
pose of enabling him, by using the lowest step as a foothold and
crouching with his body in a strained and awkward position, to
effect the coupling, without stopping the car or getting down to
the ground. The position was admittedly an improper, and cer-
tainly a very dangerous, one, not authorised to be taken. The
method adopted by the plaintiff to endeavour to effect the coupling

130

ONTARIO LAW REPORTS.

C. A.
1912

Stone

Canadian
Pacific
R. W. Co.

Moss. C.J.O.

[VOL.

was the very one most calculated to expose him to danger and
risk of injury. And there is no evidence to justify the answer
of the jury to the 7th question, an answer which, in its terms, is
inconclusive and unsatisfactory. There were no “ circum-
stances ” to prevent the plaintiff from adopting the perfectly safe
course which he admits he might have done.

Having regard to the evidence in the case, I do not think the
answers sufficient to support the judgment entered for the plaintiff ;
and I think that, notwithstanding them, judgment should have been
entered dismissing the action.

The appeal should be allowed, and the action dismissed, with
costs if exacted.

Garrow and Maclaren, JJ.A., concurred.

Meredith, J.A.: — A good deal that has been said and done
in this case seems to me to have quite missed the mark which
should have been arrived at; for instance, all of that branch of it
which deals with the requirements of the statute-law regarding
ladders at the ends of “box freight cars.” It can make no differ-
ence whether there was any such requirement in respect of the
“Wabash” car, from which the plaintiff fell, or, if so, whether that
obligation was imposed upon the company that owned the car,
or upon the company who were using it in the carriage of their
freight, or upon the defendant company, who had received
and were forwarding it as interchanged freight only, if,
as I think, it is incontrovertible that the ladder was not required
to be provided for the work in which the plaintiff was engaged
when he fell and was hurt; but, on the contrary, that, if he had
made use of any such ladder for such a purpose, he would have
misused it, contrary to the provisions of the enactment in question,
against the wishes and interests of his masters, against his own
interests, and against the first instincts of all animals — self-preserva-
tion. If he had fallen from such a ladder as he did from the one
in question, his life, not only one hand, would have paid the pen-
alty.

It is quite obvious to any one who has not had, as the plaintiff
had, six years’ experience in railway matters as a brakesman and
otherwise, that it is dangerous to go between cars of any train,
and extremely so if they are in motion; and it is equally obvious

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131

that that risk should not be taken in any case in which it can rea-
sonably be avoided; quite obvious that it is against the interests
of him who does it, of his relatives and friends, and of his employ-
ers, as well as against the public interests, that risk of life or limb
should be undertaken when there is no occasion for it.

As to his experience, he tells of it in these words: —

“Q. You have had no experience in railway matters before
you went into the employ of the C.P.R.? A. Yes, sir.

“Q. To what extent? What was your experience? A. I had
been with the Canadian Express Company for about five or six
years, and I was with the Grand Trunk as brakesman.

“Q. Passenger brakesman or freight? A. Passenger and
freight both.

“Q. Then your experience up to the time you quit their
employ would be about five or six years, would it? A. Yes,
about six years.”

In the same section of the Railway Act in which the require-
ment as to the ladders is contained, it is expressly and plainly
required, in the interests and for the safety of just such men as the
plaintiff, that automatic couplers, “which can be uncoupled
without the necessity of men going in between the ends of the
cars,” shall be provided, and used, upon cars such as that in ques-
tion. So that, if such couplers are provided, what possible excuse
can there be for going between the cars to uncouple them, not to
speak of going between them and doing the work on a perpendicu-
lar box car ladder, without any sort of reason for not doing that
work from without the cars?

It seems to have been thought necessary, by a learned Judge,
to say that you cannot have damages for injury to a finger in the
closing of a passenger carriage door, merely because the head-
light of the engine, which was drawing the train, was not burning
when it should have been; and so it seems to me to be necessary
to repeat somewhat frequently the observation that one cannot
have damages for any negligence which is not the proximate cause
of the injury.

So that really this case depends entirely upon the two ques-
tions: (1) whether the defendants were guilty of -any negligence in
respect of the kind of brake which the plaintiff was attempting to
uncouple only; and, if so, (2) whether that negligence was, or

C. A.
1912

Stone

Canadian
Pacific
R. W. Co.

Meredith, J.A.

132

C. A.
1912

Stone

Canadian
Pacific
R. W. Co.

Meredith, J.A.

ONTARIO LAW REPORTS. [vol.

whether the plaintiff’s want of care in whole or in part was, the
cause of his injury.

The jury have not found any negligence in the defendants;
it would be very hard to see how they could. The question was
pointedly put to them. The substance of their findings, in so far
as they affect this case, is, that the “Wabash” car was “defective”
in not having “the ladder on the end of the car and long lever
equipment,” such as the defendants have upon their own cars;
and that, in consequence of such defects, the plaintiff was injured.

The findings are not very consistent, for, if the ladder which
was not provided had been provided, and if the plaintiff had used
it, he would have had no need of a long lever uncoupling rod.
His testimony is, that, if there had been a ladder at the end of the
car, he would have used it in uncoupling. A longer rod might
have made the task of uncoupling from the side ladder somewhat
easier; but possibly less so from an end ladder; the lengthened
rod is to enable doing the work without going between the cars.

But there is no evidence that the uncoupling rod did not fully
comply with the requirements of the statute, and no finding that
it did not; how then can the judgment be sustained? And, as
I have before mentioned, there is no finding of negligence on the
part of the defendants; and, if there had been, there is no evidence
whatever to support such a finding; the plaintiff’s case seems to
me to be hopeless in this respect; indeed, it may be that the re-
quirements of the enactment, in this respect, are all that the law
can require from any company subject to its provisions, whichever
company may be the one to which it applies, if it does not apply
to more than one of the companies concerned in the making and
the movement of the car in question.

In addition to all this, it seems to me to be impossible for any'
reasonable man to say, conscientiously, that the plaintiff’s injury
was not caused altogether by his own negligence; and considerably
less than that would deprive him of any right to recover.

The statute-law, passed for the especial benefit of persons
engaged in car coupling and uncoupling, as a brakesman especially
is, shews the impropriety of uncoupling in any manner making it
necessary to go between the cars for that purpose. If the plaintiff
were a novice complaining of being put at dangerous work without
proper instructions, the case might be different; but he was a

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133

man of six years’ experience “in railway matters;” and is without
any sort of excuse for adopting the extraordinary method which
he was employing when injured. I cannot but think it likely to
bring legal methods into conflict with the commonest of common
sense if it can be lawfully determined that the plaintiff was acting
properly in endeavouring to uncouple cars in motion, from a ladder
on the side of the car, too far, according to his testimony, from the
end of it, and,, according to the same testimony, with a foot-hold
too shallow and not wide enough to get both his feet into, and
shaky at that, with a coupler rod too short to be operated without
danger; and while supported by one foot only upon the loose
step, and one hand only upon the rung of the ladder next above
that in which his foot was, and only about twenty inches apart,
and then making an unduly long reach around the end of the car
with his right hand to uncouple; when there was absolutely no
need of attempting it, and when so doing was in the teeth of the
interest of every one, as before-mentioned, as well as of the enact-
ment already referred to.

C.A.

1912

Stone

Canadian
Pacific
R. W. Co.

Meredith, J.A.

It was suggested that the plaintiff should have our sympathy,
however unwisely he may have acted, because, it was said, he
was taking the risk in his masters’ interests and for their benefit;
the first part of the proposition I assent to, provided however
that such sympathy does not warp the judgment; the latter part
is obviously erroneous; there is no kind of evidence of over-zeal
on the plaintiff’s part in his masters’ service; as I have intimated,
he did that which was, and he must have known was, against the
interests of every one because of the danger of it; he knew that
every one’s interest required that the uncoupling should be done
from the ground without going between the cars and when they
were not in motion, and that there was no sort of reason why
that course should not be taken; but familiarity with danger
breeds contempt of it, and he is not the only man who would not
hesitate to take the risk rather than take the additional trouble
to stop the train and get down and uncouple and get up again;
for, after all, the risk might be undertaken a good many times
without a fall, and a good many falls might happen without
getting any part of one’s body under the wheels; and he is not the
only man who is willing to make the trip’s work as short as possible
and to be home again as soon as possible.

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[VOL.

0. A
1912

Stone

Canadian
Pacific
R. W. Co.

Meredith, J.A.

The jury have hedged themselves in, with a shifty answer,
from the untrue finding that the plaintiff could not, by the exercise
of reasonable care, have uncoupled the cars in safety: “In our
opinion, not under the circumstances;” and they quite dodged
the question whether that which the plaintiff was trying to do
when he fell was “according to good and proper practice,” mean-
ing, I suppose, was it a proper method of uncoupling the cars?
The jury should have been asked what they meant by “under
the circumstances;” if under the circumstances of standing on
the ladder as he was and attempting to do the work in that way —
if they assume that that was proper — there might be some justi-
fication for the answer; but that would be entirely begging the
question.

I would allow the appeal and dismiss the action.

Magee, J.A. : — The plaintiff was brakesman on top of a freight
car, at the rear of a train which was being pushed back to be
coupled to another car which was stationary. Both cars had
automatic couplers — but in order to couple it is necessary that the
knuckle of one or other shall be open. He noticed that both were
closed. The knuckle, according to the defendants’ witness
Hawkes, can be opened by the operating lever of a moving car.
To reach the operating lever the plaintiff descended the only
ladder at that portion of the car. That was a ladder on the side
of the car, which appears from the evidence to have been reasonably
close to the corner or end.

It is, I think, clear from the evidence that it was customary
for brakesmen to operate the levers from the ladders while the
cars were moving. It had been done only a few moments before
by the other brakesman opening the coupler of the adjoining
car to make a flying shunt. The conductor says it was quite
customary, and he would not think of reporting a brakesman for
doing it, and had never told any one not to do it. The general
yard-master, called for the defendants, states that the lever can
be operated from the side-ladder.

It is sought to draw a distinction between operating the lever
on a moving car in order to uncouple, and doing so in order to
couple. But the plaintiff states, and he is not contradicted but
indeed borne out by other evidence, that he had plenty of time

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to do what he was going to do and get around to the side out of the
way before the cars would couple. Really all he proposed doing
was operating the lever on a moving car. Nowhere do I find
that to be forbidden. It was argued that this was contrary to
the defendants’ circular No. 4 of the 15th February, 1911, which,
however, the jury find the plaintiff not to have had notice of.
That circular forbids “all acts familiarly known as taking chances,”
and it calls attention to accidents which had occurred “solely by
carelessness on the part of some employee, such as,” inter alia,
“adjusting coupler . . . when 'cars are in motion.” But

Mr. Hawkes, the defendants’, yard-master, expressly states, as
one might expect, that opening the knuckle by the operating lever
is not “adjusting the coupler.” That circular naturally enough
puts “adjusting coupler” in the same category with “turning
angle-cock or uncoupling hosebags” — all which would have to
be done by going between the cars on the ground. But the
circular is luminous in respect of several operations. Thus it
refers to “accidents from holding on side of car,” but only “when
passing platform, building, or other obstruction known to be close
to track;” “kicking cars into sidings,” but only where other cars
are standing; and “detaching moving cars” without first seeing
to the brakes being in order. This last instance impliedly recog-
nises the practice of detaching moving cars if only the brakes are
in order. The plaintiff was injured in an operation not a whit
more dangerous than those which are here impliedly recognised,
and not at all one which involved the danger of going between
cars.

C. A.
1912

Stone

Canadian
Pacific
R. W. Co.

Magee, J.A.

But it seems to me that the plaintiff was not warranted in
trying to work the lever from the position which he took, that is,
holding with one hand the very lowest rung of the ladder only
fourteen inches above the edge of the car, with one foot on the step,
only six and a half inches below the edge. He does not shew
that there would have been any difficulty in reaching the lever
while grasping a rung higher up. Mr. Hawkes considers it quite
feasible to have done so, even from the upper rung, which I would
doubt, though it is not contradicted. The plaintiff would seem
to have been in fact inviting disaster by attempting to reach the
lever while in that attitude. There was no compulsion of any
sort upon him to do so, either from fear of injury to his employers’

136

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1912

Stone

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Pacific
R. W Co.

Magee, J.A.

property or otherwise. It is simply a case of unnecessary over-
balancing, so far as appears — and, however much one may feel
sorry for his injury, it cannot, I think, be said to be caused by the
defendants’ negligence or breach of statutory duty, if there was
such duty as to this car of another company.

Appeal allowed.

1912

[IN THE COURT OF APPEAL.]

April 4.

Rex v. Britnell.

Criminal Law — Exposing for Sale or Selling Obscene Books — Criminal Code,
sec. 207 — Conviction — Evidence — Knoioledge of Sale and of Character
of Books.

To sustain a conviction under sec. 207 of the Criminal Code, R.S.C. 1906,
ch. 146, as amended by 8 & 9 Edw. VII. ch. 9, for selling or exposing for
sale obscene books, it must be shewn that the books were sold or exposed
for sale with the knowledge of the defendant, and that he knew of their
obscene character.

And. held, upon a case stated by a Police Magistrate, that, having regard to
the character and extent of the defendant’s business and to his reputa-
tion as a book-seller, there was no reasonable evidence upon which he
might be convicted of having knowingly sold or exposed for sale obscene
books, within the meaning of sec. 207.

Case stated by one of the Police Magistrates for the City
of Toronto.

The defendant was convicted upon an information charging
that, in the month of April, 1911, he, the defendant, contrary
to law, exposed for sale and sold certain indecent and obscene
books, tending to corrupt public morals, contrary to the form
of the statute in such case made and provided.

Section 207 of the Criminal Code, R.S.C. 1906, ch. 146, as
amended by 8 & 9 Edw. VII. ch. 9, provides: “Everyone is guilty
of an indictable offence and liable to two years’ imprisonment
who knowingly, without lawful justification or excuse, — (a)
makes, manufactures, or sells, or exposes for sale or to public
view, or distributes or circulates, or causes to be distributed or
circulated, or has in his possession for sale, distribution or circu-
lation, or assists in such making, manufacture, sale, exposure,
having in possession, distribution or circulation, any obscene
book or other printed, .typewritten or otherwise written matter,
or any picture, photograph, model or other object tending to

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corrupt morals, or any plate for the reproduction of any such
picture or photograph.”

The stated case was as follows: —

“ Pursuant to the order of the Court of Appeal dated the
15th May, 1911, I submit the following questions for the con-
sideration of the Court: —

“1. Was there evidence upon which the defendant might be
convicted of the offence of selling obscene books, within the
intent and meaning of sec. 207 of the Criminal Code?

“2. Was there any evidence upon which the defendant might
be convicted of having knowingly sold or exposed for sale obscene
books, within sec. 207 of the Criminal Code?”

December 6, 1911. The case was heard by Moss, C.J.O.,
G arrow, Maclaren, Meredith, and Magee, JJ.A.

George Wilkie, for the defendant, argued that it had not
been proved that the books had been exposed for sale or that they
were obscene, or that they were sold or exposed for sale with
the defendant’s knowledge, or that the defendant knew of their
obscene character. These were essentials of the case for the
prosecution: Rex v. Beaver (1905), 9 O.L.R. 418. On the ques-
tion of obscenity, he referred to Burbidge’s Digest of the Criminal
Law of Canada, pp. 163 and 164, especially the note at the foot
of the latter page.

J. R. Cartwright, K.C., and E. Bayly, K.C., for the Crown,
contended that the defendant had been rightly convicted. There
was sufficient evidence to establish that the defendant had know-
ledge that the books were on sale and were sold and that they
were obscene. On the question of obscenity they referred to
The Queen v. Hicklin (1868), L.R. 3 Q.B. 360; People v. Doris
(1897), 14 App. Div. N.Y. 117; People v. Muller (1884), 96
N.Y. 408; State v. McKee (1900), 73 Conn. 18; United

States v. Bennett (1879), 16 Blatchf. (Circuit Court) 338;
Rex v. Key (1908), 1 Cr. App. R. 135.

Wilkie, in reply.

April 4, 1912. Meredith, J.A. : — The convicted man is a
reputable book-seller, who carries on business, in an extensive
way, in one of the business centres of Toronto. Although neither
his reputation, nor the character and extent of his business, is

C. A.
1912

Rex

Britnell

10 — XXVI. O.L.R.

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Britnell

Meredith, J.A.

a reason why he should not be convicted, and punished, if guilty,
yet they are not things without weight, and very considerable
weight, in considering the probabilities of the truth of the charge
against him upon the question whether there was any reason-
able evidence of guilt adduced against him at the trial, as well
as upon the question of fact, with which the Court cannot deal,
whether guilty or not guilty.

The charge against him seems to have been a double one in
two senses, exposing for sale and selling two different obscene
books; but no question is raised in that respect; the conviction
seems to have been in accordance with the charge, as if of one
offence only.

The offence is one against morality, and one of a despicable
character; the maximum punishment of which is two years’
imprisonment; and it must be “ knowingly” committed, “ with-
out lawful justification or excuse.”

Assuming the books to have been sc Id, or exposed for sale,
and to have been obscene books, which is assuming a good deal
in favour of the prosecution, two other essential things must have
been proved against the accused before he rightly could have
been convicted: (1) that the books were sold or exposed for
sale with his knowledge; and (2) that he knew of their obscene
character. This is but a reasonable provision of the law; if it
were otherwise, the lot of a book-seller, however honest and
anxious to avoid anything like offending morality, would be a
hard one; and especially hard upon one who carries a stock of
a quarter of a million volumes, as one of the witnesses thought
the accused does.

Neither book was manifestly or notoriously obscene or im-
moral; and it may be that neither is in that respect better or
worse than a great number of books which are freely sold and
read everywhere; and there is, I should think, nothing in either
of them to make them very attractive to any one; and the small
profit to be derived from their sale is hardly such as would in-
duce a large dealer to conceal them in his cellar, so that he might
sell them with less chance of being found out, and to sell them
with the possibility of two years’ imprisonment in the peni-
tentiary before his eyes.

There was no sort of evidence of any exposure of them for

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sale; and there, manifestly, should have been a finding of “not
guilty” to that extent; but there was not; on the contrary, there
seems to have been a conviction in respect of which the penalty
imposed was to some extent imposed.

Nor can I think that there was any reasonable evidence oL
a guilty knowledge on the part of the convicted man of the sale
which was made, and which was of one of the books only, or of
its obscene character, if it really has any.

It is quite plain that, in the extensive business of the convicted
man, the books in question might have been bought and sold
without his knowledge; he did not attend to the department in
which such books, that is, “works of fiction,” are sold. He
testified that he did not know that there were any such books
in his establishment; that he had a year or more before found
invoices of them and returned them, because, from what he had
heard, he thought their tendency was suggestive, and so did
not want to sell them. There is not a word of testimony to the
contrary of this; the most that can be said is, that, if dealing
with a man who might be thought untruthful and tricky, there
were some circumstances of suspicion, a book having been sold
and other books having been found in the cellar; things which
are not unsatisfactorily explained by the witnesses for the prose-
cution. But no one, much less a reputable man doing an exten-
sive reputable business, is to be convicted on suspicion merely;
when there is no more than that against him a verdict of “not
guilty” should be entered. The statement that, from what he
had heard, he thought their tendency suggestive, is a good way
removed from an admission that he knew that they were obscene.

The cases which were referred to on the argument here were
very different from this case; in them the obscene character of
the writings was manifest, and in some of them it was the author
who was prosecuted and who had sold them.

In a case of this character, where there may be different
opinions as to the immorality of a book, which is being generally
sold here and in other countries or another country, it would
seem to me to be the better course for those who object to its
sale on that ground, to give notice of such objection to such a
book-seller as the convicted man is, and to prosecute only if the
objection is not heeded. No such book-seller can have any

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1912

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Britnell

Meredith, J.A.

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Britnell

Meredith, J.A.

reasonable desire to sell such books as those in question, if they
be obscene, for all there is in it for him, at the risk of being branded
as a criminal and sent to penitentiary for two years, after first
perjuring himself in the hope of escaping conviction.

I would answer the second question in the negative and direct
that the accused be discharged.

Magee, J.A. : — The two questions stated by the Police Magis-
trate under the order of the Court for its opinion refer only to
sec. 207 of the Criminal Code, 1906, under which he had professed
to convict. That section, as amended in 1909, declares that
every one is guilty of an indictable offence “who knowingly,
without lawful justification or excuse, — (a) makes, manufactures,
or sells, or exposes for sale or to public view . . . any obscene

book or other printed, typewritten or otherwise written matter,
or any picture, photograph, model or other object tending to
corrupt morals.” In the information laid against this defen-
dant it was charged only that in the month of April, 1911, he,
“contrary to law, exposed for sale and sold certain indecent and
obscene books, tending to corrupt public morals, contrary to the
form of the statute in such case made and provided.” It was
not charged that he did it either knowingly or without justifica-
tion or excuse. It was necessary to allege that he did it knowingly
to bring it under that section. The information was not amended.
He, therefore, was not charged with any criminal offence under
that section. The words “contrary to law” and “contrary to
the form of the statute” do not make up for the absence of that
allegation of knowledge.

In the formal conviction, however, the words “knowingly” and
“without lawful justification or excuse” are inserted in setting out
the offence, which is otherwise described as in the information,
except that the word “morals” is substituted for “public morals;”
and the word “obscene” for “indecent and obscene.”

In his statement of the case for this Court, the learned Police
Magistrate says: “The defendant elected to be tried summarily
and pleaded not guilty. After hearing evidence, I was of the
opinion that the charge was proved, and accordingly convicted
the defendant, being satisfied that the books were obscene, and
that the defendant knew that they were on sale in his establish-

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ment.” It is not specifically stated whether or not the Police
Magistrate was satisfied that the defendant knew of the books
being obscene, and we are as to that left to the inference to be
drawn from the fact that he made the conviction. In his reasons
for his decision, given at the time, he said, “The section of the
Code under which this prosecution is brought is 207.”

It would, therefore, appear that the defendant was convicted
of an offence with which he was not charged and for which he
had not consented to be tried summarily.

As the charge was laid “contra formam statuti,” and was
dealt with under sec. 207, and the questions propounded refer
only to that section, it is unnecessary to consider how far, at
common law, a book-seller charged with selling and publishing
an obscene libel, sold by his clerk in the course of his business,
could shelter himself by his want of knowledge of the sale, or of
the contents, or how far either must be brought home to him.

Dealing, then, with the case as one under sec. 207, there
must be shewn knowledge of the sale or exposure for sale, and
also knowledge of the character of the book. That the latter
must be shewn was held by this Court in Rex v. Beaver , 9 O.L.R.
418. The former is also manifestly necessary. An auctioneer
selling a library, or shelf or package of books, might not know
what books it contained. Objectionable articles may be made
or sold in a factory or shop; and, while the statute would be
futile if the proprietor could escape because they were not made
or sold directly by himself, but by his employees, though with
his knowledge, it might also cause injustice if he could be punished
because the making or selling was done for his benefit by his
employees, though without his knowledge or consent, or even
against his orders.

The only books specifically referred to in the evidence are
three recent novels, which, for brevity, I may refer to as X, Y,
and Z. There were, indeed, other books found along with these
three in the cellar of the defendant’s shop, but the Police Magis-
trate does not name them, and merely says that some of them
were of the same type, and some of them he had looked through
sufficiently to see that they all were more or less within the scope
of the test of obscenity.

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Apart from evidence as to the character of the three books,
X, Y, and Z, the prosecution contented itself with proving that
a copy of Y had been bought on the 6th April at the defendant’s
shop from a clerk who brought it from the cellar; and that on
the 8th April a Police Inspector went to the shop and there saw
the defendant, who said that he had not a copy of X or Y; but
the Inspector says, “On searching, we found,” in a box in the
cellar, eleven copies of X and thirteen of Y, besides other books,
including one or more copies of Z, and that, in the defendant’s
presence, his clerk said that he had been selling the book Y,
and he thought that the defendant knew it. It is not stated
whether the defendant made any remark thereupon. Indeed, it
is not said that he heard it. He was not asked about it when
called in his own defence, and he did not refer to it.

It is not shewn that any of the public or customers were ever
admitted to the cellar. There was, therefore, no evidence of ex-
posure of any of the books for sale, and only proof of a sale of one
copy of one book, Y, by the clerk, and no proof of the defendant’s
knowledge of the contents of any of the books. Z and the other
unnamed books are not further spoken of, and may be left out
of consideration.

For the defence, the defendant himself and four of his
clerks gave evidence. It appears that his stock contains
150,000 to 250,000 books, of which 4,000 to 7,000 are kept
in the cellar in stock. A clerk says the whole place is full of
books, and another, that he “put the boxes of books down the
cellar, and especially as at Christmas time there was not room
for as much stock.” The defendant says that in the cellar he
has in stock a theological library and cook-books and other books
that he has not room for in the shop. One department of the
business is that of dealing in old or antiquarian books. One of
his clerks, Appleton, who states that he looks after the sale of
the new books, says that X came out in 1907, “and was sold by
other dealers here before we had it.” “We sold a great many
copies till lately, and now we would not sell more than one a
month or so.” The defendant, himself, testified that he did sell
them when they first came out, but “a year or more ago” he
found in the invoices a shipment of X and Y, and he returned
the books, as from what he heard he thought the tendency of

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the books was suggestive, and so did not want to sell them;
and he did not know, when the Police Inspector asked him about
them, that he had a copy of either, and he had not read X nor Y,
“nor such books.” A clerk also testifies that, “a year ago or so,”
the defendant returned a shipment containing X and Y, “be-
cause they were not, I think, the class of books he desired to sell.”
Even if we take these statements as going far enough to shew
that the defendant knew that the books were obscene or such as
tended to corrupt morals, it is evident that there is here no proof
of a sale with his concurrence after he had learned of the objec-
tionable character of the books.

Then it appears from the evidence of Appleton, who
has charge of the sale of the new books, that “a year ago
we got some twenty-five copies of each of these two books,”
X and Y, and “ those found by the police were the re-
mainder of that order.” The invoice containing Y seems to
have been produced by the witness before the Police Magis-
trate, but is not among the papers sent to this Court, and
the exact date of it does not further appear. Appleton says:
“The defendant probably did not know that I had ordered these
books, as I am in charge of that branch.” Another clerk says
that the defendant is at the office in rear, and does not know what
new books are in stock. Another says: “The whole place is full
of books, 250,000 I would think. Appleton and I are in charge
of the front of the shop. The defendant is at the office in rear,
and looks after the old books. . . . The defendant does not

know just what books we have bought, nor all we have in stock.”
Another clerk, Congdon, who says he is in charge of the anti-
quarian books, says that the defendant also looks after that de-
partment, and the defendant does not know what new books
are in stock. The defendant, himself, says: “I am at the back
of the shop, where the branches of the business I look after are
situated: I do not attend to the new novels at all.” He says
that the clerk who ordered the last copies of these two books was
in his employ when he returned the shipment, but he only remem-
bered telling Congdon of having sent the shipment back, and
he, Congdon, would have nothing to do with ordering these books
— “they would likely be ordered by Appleton.”

Bearing in mind the extent of the defendant’s business, and

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the fact that the prosecution proved only one sale — and that
by a clerk — of one book, without shewing that the defendant
had any knowledge of its contents, can it be said that this evi-
dence given for the defence affirmatively establishes knowledge
by the defendant that this small order for these books had been
given by his clerk, after he himself had sent back a shipment of
these very books on account of their character? It may be said
that, even taking the evidence for the defence, it is not absolutely
clear that the defendant did not know of his clerk’s order, whether
at the time or afterwards, or of the receipt of the books there-
under, even though he thought that all had been sold; but it
was for the prosecution to establish knowledge, not for him to
shew want of knowledge; and, if the prosecution had had doubts
upon the subject, it could have been cleared up by cross-examina-
tion. That not having been done, there was, in my opinion,
failure of proof of knowledge of the sale, even in the sense of
implied or tacit authority or consent to it; and, therefore, the
second question should be answered in the negative.

It is unnecessary to answer the first question, as it becomes
merely academic when the second is answered in the negative.
No specific parts of any of the books have been referred to in
the information, the conviction, the evidence, or in the argu-
ment. The statement by the Police Inspector as to the contents
of X and Y was conceded to be at best inaccurate. No particu-
lars seem to have been asked for by the defence, or delivered.
The result would be that it would be necessary for the Court to
peruse the books seized to see if it could discover any objection-
able page, phrase, or sentiment, before it could answer the ques-
tion propounded. In a sense this would be to ask the Court
to be accuser instead of Judge. It is a course which should not
again be adopted.

The defendant, on the evidence, should, in my opinion, have
been acquitted, and the conviction should be declared invalid.

Moss, C.J.O., Garrow and Maclaren, JJ.A., concurred.

Conviction quashed.

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[DIVISIONAL COURT.]

Beatty v. Bailey.

Mortgage — Covenant for Payment Implied in Registered Charge under
Land Titles Act — Action for Mortgage-money — Instrument not under
Seal — Effect of Provisions of Act — Limitation of Actions — “Specialty”
— Period of Limitation — Second '■ Mortgagee — Cessation of Charge for
Benefit of First Mortgagee — Sale under Poioer- — Effect of, upon Right
to Sue — Inability to Reconvey — Default of Mortgagor — Reservation
of Rights.

The defendant, in 1891, created a charge upon land which had been brought
under the Land Titles Act, by an instrument, not under seal, in the
form given in the schedule to the Land Titles Act then in force (No. 28
in the schedule to R.S.O. 1897, ch. 138). This was a second charge or
mortgage upon the land, and payment of ithe moneys secured was to be
made in 1894. The instrument was registered under the Act. It did not
in terms contain a covenant for payment of the mortgage-money: —

Held, that, under sec. 34 of the Act (R.S.O. 1897, ch. 138), such a coven-
ant was implied as against the person who created the charge, com-
pleted by registration; and an action upon that covenant was not barred
by the lapse of less than twenty years from the date of default, which
was not earlier than 1894, being (by the effect of the Land Titles Act,
though the instrument was not under seal) an action upon a “specialty,”
within the meaning of the Statute of Limitations, R.S.O. 1897, ch. 72,
sec. 1 (6) — a covenant contained in an indenture of mortgage made
before the 1st July, 1894.

Sections 13, 34, 40(3), 41, 101, and 107 of the Land Titles Act, R.S.O.
1897, ch. 138, and sec. 102 of the Land Titles Act, 1 Geo. V. ch. 28,
considered.

The second chargee, the plaintiff, in order to free the land for the benefit of
the first chargee, in 1903 executed a cessation of his second charge, and
that cessation was registered. By it he expressly reserved his rights
against his mortgagor, the defendant, both for payment of the moneys
secured by the charge and upon the covenants contained in the charge: —

Held, that the effect of the registration of the cessation was, upon sale by
the first mortgagee, to give the purchaser an absolute ownership as to
the land; but it left unimpaired the right of the plaintiff to proceed for
the recovery of the amount due by the mortgagor, the defendant.

Although the mortgagee suing on a covenant in the mortgage must ordin-
arily be in a position to reconvey the land upon payment of what is due,
that does not necessarily apply to the case of a second mortgagee whose
rights against the land have been extinguished by the act of the first
mortgagee. The inability of the mortgagee to convey will not bar the
right of action on the covenant, if such inability arises from any default
of the mortgagor. The mortgagor’s duty was to pay off the first mort :
gage, and so prevent the exercise of the power of sale by which the
equity of redemption was extinguished; and the loss of the land was
occasioned, not by the action of the plaintiff in releasing his charge, but
by the rights conferred upon the first mortgagee by his security, and
by the default of the defendant himself.

In re Burrell, Burrell v. Smith (1869), L.R. 7 Eq. 399, applied and
followed.

Palmer v. Hendrie (1860), 28 Bea/v. 341, distinguished.

Judgment of Denton, Jun. Co.C.J., reversed.

An appeal by the plaintiff from the judgment of Denton,
Jun. Co. C.J., dismissing an action brought in the County Court
of York for the recovery of $797.20, for principal and interest,

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upon the covenant implied in an instrument executed and regis-
tered for the purpose of creating a mortgage or charge upon land
made subject to the Land Titles Act, R.S.O. 1897, ch. 138, now
1 Geo. V. ch. 28.

The following reasons for judgment were given by Denton,
Jun. Co. C.J. : — The facts of this case are not in dispute. On the
26th August, 1891, the defendant executed a charge under the
Land Titles Act in favour of the plaintiff and one Boulton, for
the sum of $350 and interest, on property in Melbourne avenue,
Toronto. This was a second mortgage; the first mortgage, for
$1,350, being at that time held by one Ferguson. On the 9th
October, 1891, Boulton transferred his interest in the said charge
to the plaintiff, who thereby became the sole owner of the charge.
The defendant, on the 27th August, 1891, conveyed his equity of
redemption to on^e Sarah Morrison, who continued for a short time
to pay the interest on the mortgages. On the 1st November,
1892, Ferguson transferred his first mortgage to Janet Harvey.
No interest or principal was paid on either of these mortgages
subsequent to 1894. In 1903, Janet Harvey, the first mortgagee,
sold the property, for a sum which was as much as could be got for
the property at that time, but which was considerably less than
her mortgage debt. In order to give a title, she had either to
foreclose or obtain a release of the equity of redemption from
Morrison and a discharge from the plaintiff, the second mort-
gagee. She chose the latter course; and, on the 30th March,
1903, Sarah Morrison transferred her equity of redemption to
the first mortgagee. The plaintiff then executed a cessation or
discharge of his mortgage, dated the 11th May, 1903.

This cessation contains the following clause: “Now, there-
fore, I hereby authorise the Master of Titles to notify on the
register the cessation of the said charge as to the lands described
therein, it being expressly understood that I, nevertheless, reserve
all my rights, claims, and demands against the said George Bailey
and Alexander Claude Foster Boulton and eithfer of them, his
heirs, executors, administrators, and assigns, both for payment of
the moneys secured by the said charge and upon the covenants
contained in said charge and in the transfer thereof, and that this
authority shall not release, prejudice, waive, or affect any other

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security or securities which I now have or which I may at any
time hereafter obtain for the payment of the moneys secured by
the said charge, it being my intention to retain all my rights,
save the right to look to the said lands for the payment of the
moneys secured by the said charge.”

This action is brought on the covenant in the second mortgage
to recover the principal and the interest that has accrued since
1894.

A discussion took place at the trial as to whether or not the
action was barred by the Statute of Limitations. But, in the
view I take of the case, it is unnecessary to consider that point.

It seems to me that the plaintiff cannot recover, and that
for the reason that every mortgagor has a right to have a
reconveyance of the mortgaged property, upon payment of the
money due upon the mortgage; and tha.t every mortgagee is
charged with the duty of making such reconveyance upon such
payment being made. Walker v. Jones (1866), L.R. 1 P.C. 50,
is, I think, conclusive against the plaintiff’s contention. In that
case, as here, the mortgagee discharged the lands and premises
from the security which he held, but purported to reserve to him-
self any other remedy or security which he had on promissory
notes which the mortgage in question was given to secure. That
is upon all fours with this case. Other cases upon the same line
are: Allison v. McDonald (1893), 20 A.R. 695; Rourke v. Robin-
son , [1911] 1 Ch. 480; Palmer v. Hendrie (1859), 27 Beav. 349;
Perry v. Barker (1806), 13 Ves. 198; Gowland v. Garbutt (1867),
13 Gr. 578; Munsen v. Hauss (1875), 22 Gr. 279; In re Thuresson
(1902), 3 O.L.R. 271; Mendels v. Gibson (1905), 9 O.L.R. 94.
These cases, it is true, are first mortgage cases, and it may he
contended (though it was not dwelt upon in argument) that
this rule does not apply to the case of a second mortgage. But,
while there is, of course, a vast difference between a first and
second mortgagee as regards the legal estate and the tenure and
value of his security, is there any valid reason for refusing
to apply this principle of law to each? A second mortgagee
has vested in him an equity of redemption which he holds, as
it were, in pledge. Upon repayment, the second mortgagee, by
his discharge, revests in, or reconveys to, the person then en-
titled to it, his interest in the mortgaged premises, which is the

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equity of redemption. If the interest of the second mortgagee
has been extinguished by the -foreclosure of the first mortgage,
then manifestly he has, through no fault of his own, nothing to
reconvey; but. where he voluntarily discharges his interest in
the lands from his second mortgage, even although this is done
to assist the first mortgagee to obtain a clear title, it is not plain
to me that the same rule of law ought not to apply.

In this case the plaintiff, by discharging the lands from
the security which he held, voluntarily and effectually put it
out of his power to reconvey his interest in the mortgaged
premises. By that act, on the authorities cited, he has pre-
cluded himself from recovering against the mortgagor on the
covenant.

The action will be dismissed with costs.

April 1. The appeal was heard by a Divisional Court com-
posed of Boyd, C., Latchford and Middleton, JJ.

W. J. Elliott , for the plaintiff. No defence arises by reason
of the Statute of Limitations. When the defendant released the
land, he expressly reserved his rights under the covenant in re-
spect of the moneys to be paid: In re Richardson (1871), L.R.
12 Eq. 398. The mortgagor was still bound under the covenant
to pay imposed by statute; and the action is, therefore, one
founded on a specialty, and is not barred until after twenty years
from default: Essery v. Grand Trunk R.W. Co. (1891), 21 O.R.
224. See also R.S.O. 1897, ch. 138, sec. 107; and see the same
section, as amended, 1 Geo. V. ch. 28, sec. 102, as to a seal being
unnecessary. The learned County Court Judge has held that
the plaintiff cannot recover, because every mortgagor has a right
to have a reconveyance of the mortgaged property on payment
of the money due upon the mortgage. But the inability of the
mortgagee to reconvey will not bar the right of action on the
covenant if such inability arises from any default of the mort-
gagor: Coote’s Law of Mortgages, 7th ed., vol. 2, p. 982. If
the mortgagor had paid off the first mortgage, the property would
not have been sold under the power: In re Burrell , Burrell v.
Smith (1869), L.R. 7 Eq. 399; Driffill v. McFall (1877), 41 U.C.R.
313.

W. C. Chisholm, K.C., for the defendant. The claim is barred
by the Statute of Limitations, R.S.O. 1897, ch. 72, the debt no

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being a specialty debt. The judgment of the learned County
Court Judge is right and should be affirmed. The mortgagee
must always be in a position to reconvey the land upon pay-
ment being made by the mortgagor. Here the plaintiff, by
discharging the lands from the security which he held, negatived
the possibility of reconveying. (Reference to the cases cited by
the learned Junior Judge, supra.)

Elliott, in reply.

April 6. Boyd, C.: — The Land Titles Act was expressly de-
signed to simplify titles and to facilitate the transfer of land; it
is not intended to change or destroy civil rights and remedies.
True it is that “ seals” were in effect abolished as a necessary
part of any instrument affecting land, and the forms given in
the Act or approved by the Act for the transfer and the mort-
gaging or charging of land are to be without seals. This is in-
tended to emphasise the fact that the virtue of the Act does not
rest on the technical form and execution of the conveyance, but
upon the fact of the instrument (whatever it is) being registered
under the Act. It is the certificate of this registration held by
the owner which corresponds to the ordinary possession of title
deeds: R.S.O. 1897, ch. 138, sec. 101.

Section 13 provides that the first registration of any person
as owner of land with an absolute title shall vest in that person
an estate in fee simple. Section 33 provides for the mortgaging
of registered land thus: every owner may charge the land with
the payment at an appointed time of any principal sum, which
charge shall be completed by entering on the register the person
in whose favour the charge is made as the owner of the charge.
Section 34 provides that, where such a registered charge is created
on land, there shall be implied on the part of the owner of the
land, his heirs, executors, etc., a covenant with the owner of the
charge to pay the principal sum charged. And, by sub-sec. 2,
where any charge, whether under seal or not, is expressed to be
made in pursuance of the Act respecting short forms of mort-
gages, or refers thereto, then the form of words therein (according
to the clauses numbered) shall have the same meaning and effect
as are provided for in the Act as to short forms.

By sec. 40 (3), on the certificate of the owner of a charge autho-

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rising the discharge of any part of the land therefrom or any
part of the money secured thereby, the Master may note on the
register the discharge of such land from the charge or the dis-
charge of such part of the money.

By sec. 41, every transfer of land under the Act is completed
by entering on the register the transferee as owner; and till
such entry the transferor shall be deemed to remain owner of
the land.

Section 101 provides for the creation of a lien on the land,
that is, in equity such as would arise out of a deposit of the title
deeds.

Section 107 is thus expressed: “Notwithstanding the pro-
visions of any statute, or any rule of law, any charge or transfer
of land registered under this Act may be duly made under a charge
or transfer without seal.” By amendment made after and not
affecting this transaction, this section is remodelled by declaring
that the charge or transfer may be duly made by an instrument
not under seal, and if so made, the instrument and every agree-
ment, stipulation and condition therein shall have the same
effect for all purposes as if it were made under seal (Land Titles
Act, 1 Geo. Y. ch. 28, sec. 102).

By the rules annexed to the Act, No. 71 directs the use of the
forms given in the schedule, and form No. 28 is the form (not
under seal) used in this case by the owner, Bailey, when he mort-
gaged to Beatty in August, 1891. That mortgage was to be paid
in June, 1894, and in the case of an ordinary mortgage under seal
the Statute of Limitations would bar at the end of twenty years
— the mortgage being made before the 1st July, 1894 (R.S.O.
1897, ch. 72, sec. 1, sub-secs. ( b ) and ( h )). In the form given by the
Land Titles Act and in the instrument which was registered in this
case there is nothing as to a covenant to pay; that term is sup-
plied by the statute, in sec. 34, already quoted, i.e., such a
covenant shall be implied as against the owner of the land who
creates the charge which is completed by the fact of registra-
tion. So that the obligation to pay, as by and under a covenant
to pay, is to be regarded as a statutory obligation placed upon
the owner for the benefit of the lender or chargee.

The additions to sec. 107 made by 4 the amendment now ap-
pearing in 1 Geo. V. ch. 28, sec. 102, may prove useful in litiga-

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tion arising upon the instrument in other jurisdictions; but do
not seem to be needed in the present case.

The registered charge which is created uno flatu with the
covenant to pay included or implied by virtue of the statute, is
to be regarded as the effective and completed instrument, binding
both land and person so far as security for the money advanced
is concerned; and, though the land may be discharged by an
act of grace on the part of the chargee, that does not per se relieve
the covenantor from the payment of the debt till after twenty
years have elapsed without action to recover the claim.

The release given by Beatty was limited to the land in ques-
tion, and he expressly reserves his rights in respect of the moneys
secured and to be paid. The effect is to free the land for the
benefit of the first chargee, and so enable him to realise more
speedily by sale of the estate, which was not worth what was
due on the first charge. The effect of the registration of this
cessation was, upon sale, to give the purchaser an absolute owner-
ship as to the land, but to leave unimpaired the right of the
plaintiff to proceed for the recovery of the amount due by the
mortgagor, Bailey: In re Richardson , L.R. 12 Eq. 398; Bell v.
Rowe (1901), 26 Viet. L.R. 511, per Madden, C.J.

The obligation to pay rests upon the covenant or contract
imposed by statute; and is, therefore, an action founded upon
a specialty, within the meaning of the Statute of Limitations,
and is not barred by lapse of time less than twenty years from
the date of default (which at the earliest was in this case 1894):
Cork and Bandon R.W. Co v. Goode (1853), 13 C.B. 826; Essery
v. Grand Trunk R.W. Co., 21 O.R. 224, following Ross v. Grand
Trunk R.W. Co. (1886), 10 O.R. 447.

No defence, therefore, arises by virtue of any Statute of Limita-
tions or lapse of time.

The judgment below, therefore, should be entered against the
defendant on this issue.

The next defence, and the one to which effect was given by
the County Court Judge, rests upon the equitable situation of
the parties, which I proceed to consider.

The first mortgagee had a power of sale by the terms of the
mortgage and the statutory charge, and could enforce a sale
against the mortgagor. It may be that the concurrence of the

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then owner of the equity of redemption and the second mort-
gagee assisted in the more inexpensive way of realising upon the
property; but it is undoubted that the land was disposed of by
the paramount act of the first mortgagee; and the law is, that,
if a surplus remains unpaid after the exercise of a power of sale,
the mortgagee may sue for its recovery by action on the covenant:
Rudge v. Richens (1873), L.R. 8 C.P. 358. The release of the land
by the second chargee was only to facilitate either the foreclosure
or the sale of the property by the first mortgagee — as it appeared
then that the land was not of value to satisfy even the first mort-
gage. Had the land been foreclosed by the first mortgagee,
that change of the property would not have interfered with The
right of the second mortgagee (who was not to blame) to sue
upon the covenant. No doubt the rule is, that the mortgagee
suing on a covenant in the mortgage must ordinarily be in a
position to reconvey the land upon payment of what is due.
But that does not necessarily apply to the case of a second mort-
gagee whose rights against the land have been extinguished by
the act of the first mortgagee. The law is summarised in Coote
thus, that the inability of the mortgagee to reconvey will not bar
the right of action on the covenant if such inability arises from
any default of the mortgagor: 7th ed., vol. 2, p. 982. The
mortgagor’s duty was, here, to pay off the first mortgage, and
so prevent the exercise of the power of sale by which the equity
of redemption was extinguished. I think the principles of deci-
sion acted on in in re Burrell, Burrell v. Smith, L.R. 7 Eq. 399,
466, apply to this case and go to invalidate the judgment pro-
nounced by the learned County Court Judge.

I think judgment should be entered for the amount claimed
with costs and costs of appeal.

Latchford, J.: — I agree.

Middleton, J.: — I entirely agree with my Lord the Chan-
cellor, and only desire to add a few words out of respect to the
learned Judge whose decision we are reversing.

The right of the mortgagor, when sued upon a covenant, to
demand a reconveyance of the mortgaged property, discussed in
Kinnaird v. Trollope (1888), 39 Ch.D. 636, and the cases there
cited, and the equitable right to restrain such action when the
mortgagee has put it out of his power to convey, cannot, it seems

XXVI.]

ONTARIO LAW REPORTS.

153

to me, be invoked where the inability to reconvey arises from
the default of the mortgagor himself. Here the non-payment
of the first mortgage made the estate of the mortgagee absolute
at law, and made the right of the plaintiff, as second mortgagee,
liable to foreclosure in equity.

I do not think that the consent given by the plaintiff to the
immediate exercise by the first mortgagee of his right to sell the
lands operates to release the covenant. He has at most waived
the taking of formal legal proceedings by the first mortgagee,
which would not be to the advantage of any one; and, more-
over, in his waiver he has expressly reserved his rights against
the mortgagor.

It is clear, to me at least, that the loss of the property was
occasioned, not by the action of the plaintiff, but by the rights
conferred upon the first mortgagee by his security, and by the
default of the defendant himself. This brings the case within
the principle enunciated in In re Burrell, Burrell v. Smith, L.R.
7 Eq. 399.

In Palmer v. Hendrie (1860), 28 Beav. 341, the plaintiff failed
to recover because he assented to the purchase-money being paid
to the owner of the equity of redemption, instead of insisting
upon it being applied in discharge of the mortgage debt. It was
this, and not the concurrence in the sale, that was deemed im-
proper

D. C.
1912

Beatty

Bailey.

Middleton, J.

Appeal allowed.

154

ONTARIO LAW REPORTS.

D. C.
1912

April 10

[DIVISIONAL COURT.]

Rudd v. Cameron.

Slander — Words Spoken of Plaintiff in Reference to his Trade — Publica-
tion — Speaking Brought about by Action of Plaintiff — Publication —
Evidence for Jury — Privileged Occasion — Absence of Belief in Truth
of Words — Malice — Damages — Quantum.

In an action for defamatory words alleged to have been spoken by the
defendant of the plaintiff in the way of his trade, the plaintiff testi-
fied that, having learned that statements injuriously affecting him
were in circulation, and being unable to trace them to their source, he
employed two detectives “for the purpose of ascertaining the facts
and getting information for his solicitors.” The detectives, having made
the acquaintance of the defendant, told him that they were going to
erect a club house, and that the plaintiff was anxious to secure the
contract for building it. It was upon what the defendant then said
that the action was based: —

Held, that, although the speaking of the words was brought about by the
action of the plaintiff, there was evidence of publication for the jury.
Review of the authorities.

Duke of Brunswick v. Harmer (1849), 14 Q.B. 185, followed.

Held, also, that, although the occasion on which the words were spoken
was privileged, there was evidence, which the jury believed, that there
was no truth in the statements made by the defendant; and evidence
that he knew that they were untrue, or that he made them recklessly,
not caring whether they were true or false; and evidence from which
malice might be inferred.

Held , also, that, while the damages assessed by the jury ($1,000) were
substantial, they were not, in view of the defendant’s conduct through-
out and his not having gone into the box to testify on his own behalf,
so excessive as to warrant the Court in setting aside the verdict.
Judgment of Britton, J., upon the verdict of a jury, affirmed.

An appeal by the defendant from the judgment of Britton,
J., of the 15th November, 1911, in favour of the plaintiff, upon
the verdict of a jury at the trial at Pembroke, in an action for
defamatory words alleged to have been spoken by the defendant
of the plaintiff in the way of his trade.

February 27. The appeal was heard by a Divisional Court
composed of Meredith, C.J.C.P., Teetzel and Kelly, JJ.

W. M. Douglas, K.C., for the defendant, argued that there
was no evidence of publication, and that the words were spoken
on a privileged occasion, and there was no evidence of malice.
In any event, the damages, if any, should have been merely nom-
inal. On the question of publication, he contended that, where
the plaintiff procures some one to go to the defendant for the
purpose of provoking him to utter defamatory words, there is no
publication. In support of this proposition he cited Starkie on

XXVI.]

ONTARIO LAW REPORTS.

155

Slander, 3rd ed., pp. 381 and 514, where the cases of King v.
Waring (1803), 5 Esp. 13, and Smith v. Wood (1813), 3 Camp. 323,
are referred to; and Weather ston v. Hawkins (1786), 1 T.R. 110.

E. F. B. Johnston, K.C., for the plaintiff, urged that there was
sufficient evidence of malice to take away the qualified privilege.
He also pointed out that there had been no evidence called for
the defence. As to publication, it was true that there were cases
which said that if a trap were laid to make a man say what he
would not have said voluntarily, there would be no publication.
But here there had been no trap laid. The detectives did not go
to the defendant to get him to make the slanderous statements,
but to find out if he had been making them. There had been
publication in this case. He referred to Duke of Brunswick v.
Harmer (1849), 14 Q.B. 185.

Douglas, in reply, referred to Odgers on Libel and Slander,
5th. ed., p. 296.

April 10. The judgment of the Court was delivered by
Meredith, C.J.: — The appeal is rested upon two grounds: (1)
that there was no evidence of publication; and (2) that the
occasion upon which the words were spoken was privileged and
there was no evidence of malice; and it was also contended that
the damages awarded ($1,000) are excessive.

According to the testimony of the respondent, having learned
that statements affecting him similar to those alleged to have
been made by the appellant, and which form the basis of the action,
were in circulation, and being unable to trace them to their source,
he employed two detectives “for the purpose of ascertaining the
facts and getting information for his solicitors,” which I under-
stand to mean for the purpose of finding out the author of the
statements and bringing an action against him.

The detectives, having made the acquaintance of the appellant,
adopted the ruse of telling him that they were going to erect a
club house in the vicinity of Arnprior, and that the respondent
was anxious to secure the contract for building it. Their object,
no doubt, was to induce the appellant to speak his mind as to the
respondent, and in this they appear to have succeeded, for it is
upon what was then said by the appellant that the action is based.

The occasion upon which the words were thus spoken was

D. C.
1912

Rudd

Cameron.

156

ONTARIO LAW REPORTS.

[VOL.

D. C.
1912

Rudd

Cameron.
Meredith, C.J.

privileged; but it is contended by the learned counsel for the
appellant that, the speaking of them having been brought about
by the action of the respondent himself, there was no publication;
and in support of that contention he cited King v. Waring, 5 Esp.
13; Smith v. Wood, 3 Camp. 323, 14 R.R. 752; and Starkie on
Slander, 3rd ed., pp. 381 and 514.

King v. Waring was an action for a libel contained in a letter
written by the female defendant, and Lord Alvanley, C.J., having
stated that it had been decided that giving a character to a servant
however injurious to him, yet if fairly given, would not sustain
an action, went on to say: “But if the letter was procured by
another letter, not written with a fair view of inquiring a char-
acter, but to procure an answer, upon which to found an action
for a libel, such evidence, I think, ought not to be admitted;”
but, as the learned Judge held that this was not proved, his state-
ment is but an obiter dictum .

In Smith v. Wood, the action was for a libel upon the plaintiff
in the shape of a caricature print entitled, “The inside of a parish
workhouse with all abuses reformed.” A witness having stated
that, having heard that the defendant had a copy of this print,
he went to his house and requested liberty to see it, and the de-
fendant thereupon produced it, and pointed out the figure of the
plaintiff and the other persons it ridiculed; and this, Lord Ellen-
borough ruled, was not sufficient evidence of publication to support
the action; and the plaintiff was nonsuited.

It does not appear from this statement of the facts that the
plaintiff had sent the witness to request liberty to see the carica-
ture. Mr. Odgers, however, in his work on Libel and Slander,
5th ed., p. 179, states as the facts of the case that “the plaintiff,
hearing that defendant had in his possession a copy of a libellous
caricature of the plaintiff, sent an agent who asked to see the pic-
ture, and the defendant shewed it to him.”

In stating that the person to whom the caricature was shewn
was sent to request that it should be shewn, Mr. Odgers is, I think,
in error; and in this view I am supported by the report of the
case and by what appeared in the earlier editions of Mr. Starkie’s
treatise, where attention is called to the fact that “there was no
evidence to shew that the plaintiff was in privity with the witness : ”
2nd ed., vol. 2, p. 87, note (i). In the same edition, vol. 1, p. 456,

XXVI.]

ONTARIO LAW REPORTS.

157

the facts of the case are stated as they appear in the report in 3 D - c -

1912

Camp. See also 3rd ed., p. 381, and note (i) on p. 514; 4th ed.

(Folkard), p. 374, note (s), p. 524, note (n); 5th ed. (Folkard) Rudd
p. 409, note (/), p. 441, note k.; 6th ed. (Folkard), p. 409, note Cameron.

'(/)> mid p. 441. ^ Meredith, C.J.

In the last edition of Folkard (7th ed.), Smith v. Wood is re-
ferred to, on pp. 166 and 263. In this edition the matter has been
re-arranged, and the reference on p. 166 appears in chapter 11,
which deals with communications in discharge of duty; and the
statement in the text is, that, “ where the publication of the de-
famatory matter was procured by the contrivance of the plaintiff,
with a view to the foundation of an action against the defendant,
the communication may be privileged on the ground that the
plaintiff himself was the voluntary author of the mischief com-
plained of;” and Smith v. Wood, Weatherston v. Hawkins, 1 T.R.

110, and Warr v. Jolly (1834), 6 C. & P. 497, are referred to as
the authority for the statement.

The dictum of Lord Alvanley, C.J., in King v. Waring, and
what was said by him in Rogers v. Clifton (1803), 3 B. & P. 587,
at p. 592, are also referred to for the statement that, “ where a
plaintiff, knowing the character which his master will give, pro-
cures it to be given for the sake of founding an action upon it,
lie will not be allowed to recover.”

The reference on p. 263 is merely a statement of the facts of
Smith v. Wood and of the ruling of Lord Ellenborough, C.J., as
reported in 3 Camp.

It would appear, therefore, that the first ground of appeal has
no judicial decision, but only the dictum of Lord Alvanley, C.J., in
King v. Waring, to support it.

Mr. Odgers points out (p. 180) that “in many of the older
cases-the Judges say, ‘there is no sufficient publication to support
the action/ when they mean in modern parlance that the pub-
lication was privileged by reason of the occasion;” and this may
have been what was meant by Lord Alvanley, C.J., as, I think,
appears from what was said by him in Rogers v. Clifton, 3 B. & P.

587, at p. 592. That was an action by a servant against his
former master for an alleged libel contained in a letter written
by the master to a Mr. Hand, to whom the plaintiff had applied
for a place, and Lord Alvanley, speaking of this, said: “It is

158

ONTARIO LAW REPORTS.

B. C.
1912

Rudd

Cameron.

Meredith, C.J.

[VOL.

material also to observe that, when the plaintiff in this case applied
to Mr. Hand for his place, and referred him to the defendant, he
did not tell him that the defendant would give him a good char-
acter; had he done so, I should have suspected that he wished to
lay a trap for the defendant, and procure evidence to support this
action; in such a case I should hold a party not at liberty to ascribe
the character given by his master to malice, when he had only
drawn from him that which he had a right to expect.”

However this may be, in the comparatively recent case of
Duke of Brunswick v. Harmer (1849), 14 Q.B. 185, a different view
was taken by the Court of Queen’s Bench. The action was for
libel published in a newspaper more than seventeen years before
action; the Statute of Limitations was pleaded, and it was held
that it was negatived by proof that a single copy had been pur-
chased from the defendant for the plaintiff by his agent within
six years. The libel was originally published in 18,30; two copies
of the newspaper were produced at the trial; one copy had been
obtained from the British Museum, and the other had been pur-
chased, before the commencement of the action in 1848, at the
newspaper office of the defendant, by a witness who on cross-
examination stated that he had been sent by the plaintiff tq make
the purchase and had handed the paper when purchased to the
plaintiff. It was contended by the defendant that this latter was
not such a publication as would support the issue. The presiding
Judge overruled the objection. On a motion for a new trial the
objection was renewed, and it was argued by counsel for the de-
fendant that the publication proved was in law a publication to
the plaintiff himself, and that it could not be the foundation of a
civil action. Coleridge, J., in delivering the judgment of the
Court, after referring to the facts and the contention of the de-
fendant’s counsel, said: “And, in some sense, it is true that it
was a sale and delivery to the plaintiff; but we think it was also
a publication to the agent. . . . The defendant, who, on the

application of a stranger, delivers to him the writing which libels
a third person, publishes the libellous matter to him, though he
may have been sent for the purpose of procuring the work by that
third person . . . The act is complete by the delivery; and

its legal character is not altered, either by the plaintiff’s procure-
ment or by the subsequent handing over of the writing to him.

XXVI.]

ONTARIO LAW REPORTS.

159

Of course that this publication was by the procurement of the D - °-
plaintiff is not material to the question we are now considering.” 1912

In the view of Mr. Odgers, pp. 179-180, this case, so far as the R ^ DD

question of publication merely is concerned, overrules King v. Cameron.
Waring and Smith v. Wood; and Sir Frederick Pollock’s note to Meredith, c.j.
Smith v. Wood (14 R.R. 752) is, that Lord Ellenborough’s ruling
“does not seem consistent with Duke of Brunswick v. Harmer.”

Neither King v. Waring nor Smith v. Wood was cited or re-
ferred to in Duke of Brunswick v. Harmer; the former probably
for the reason suggested by Mr. Odgers, that it related only to the
question of privilege; and the latter for the same reason, if the
facts of it were as stated by Mr. Odgers, or for the reason that it
had no application, if the facts were as stated in the report in
3 Camp.

The question has been discussed and passed upon in many
cases in the United States, and among them in Gordon v. Spencer
(1829), 2 Blackf. (Ind.) 286, 288; Yeates v. Reed (1838), 4 Blackf.

(Ind.) 463, 465; Jones v. Chapman (1839), 5 Blackf. (Ind.) 88;

Haynes v. Leland (1848), 29 Me. 233, 234, 243; Sutton v. Smith
(1850), 13 Mo. 120, 123, 124; Nott v. Stoddard (1865), 38 Vt. 25,

31; Heller v. Howard (1882), 11 111. App. 554; White v. Newcomb
(1898), 25 App. Div. N.Y. 397, 401; O’Donnell v. Nee (1898),

86 Fed. Repr. 96; Railroad v. Delaney (1899), 102 Tenn. 289,

294, 295; and Shinglemeyer v. Wright (1900), 124 Mich. 230, 240.

See also Cyc., vol. 25, pp. '370-1. In most of these cases the
supposed ruling of Lord Ellenborough, C.J., in Smith v. Wood
and the opinion expressed by Lord Alvanley, C.J., in King v.

Waring were recognised as correct statements of the law, and
followed.

Upon the whole, we are of opinion that we should follow
Duke of Brunswick v. Harmer, and, following it, hold that there
was evidence for the jury of publication, and that the first objec-
tion, therefore, fails.

The second ground of appeal also fails; there was evidence,
which the jury believed, that there was no truth in the statements
made by the defendant; and there was ample evidence, out of the
appellant’s own mouth on his examination for discovery, that he
knew they were untrue, or that he made them recklessly, not caring
whether they were true or false; and there was evidence from which

160

ONTARIO LAW REPORTS. [vol.

D. C.
1912

malice might be inferred, in the bad feeling which had existed on
the part of the appellant towards the respondent, and his state-

Rudd

Cameron.

ments to the respondent’s book-keeper and stenographer, Alice
Miller.

Meredith, C.J.

The damages are substantial; but, in view of the appellant’s
conduct throughout and his not having gone into the box to testify
on his own behalf, we cannot say that they are so excessive as to
warrant the Court in setting aside the verdict.

The appeal is dismissed with costs.

1912

[IN CHAMBERS.]

Re Const antineau and Jones.

April 11.

Costs — Crimlinal Proceedings — -Order for Payment by Prosecutor of Costs
of Accused — Taxation — Right of Appeal — Criminal Code, secs. 689, 1047
— Construction of Order — Right to Costs of Preliminary Inquiry be-
fore Police Magistrate — Mandatory Order.

No appeal lies from the taxation of costs pursuant to an order of the
Court, under sec. 689 of the Criminal Code, for payment by the prose-
cutor of the costs of the accused.

Section 1407 of the Criminal Code is wide enough to apply to all costs
ordered to be paid under any of the earlier provisions of the Code;
and, there being no tariff of fees provided with respect to criminal
proceedings, the tariff in force with respect to the costs of civil pro-
ceedings is applicable; but the right of appeal given in civil cases is
not made to apply by the mere introduction of the civil tariff.

The order for payment of costs recited the information laid against the
accused before a Police Magistrate, the committal of the accused for
trial, and the notice of discontinuance given by the complainant; and
the award was “of the costs occasioned by the said proceedings:” —
Held, that the order adequately awarded the costs of the preliminary in-
quiry before the Police Magistrate; and that, upon the true construc-
tion of sec. 689, where costs are awarded in general terms, these include
the costs of the appearance on the preliminary inquiry.

A mandatory order was made directing the local officer who had taxed the
costs under the order to tax and allow to the accused his costs of the
preliminary proceedings before the Police Magistrate.

An information was laid by Const antineau against Jones
before the Police Magistrate at L’Orignal for the publication of
a defamatory libel. Jones was committed for trial, and at the
assizes was surrendered by his bail; but, the prosecutor not
appearing, was discharged; and an order was made by Latch-
ford, J., for the recovery by the accused (Jones) from the prose-
cutor (Constantineau) of his (Jones’s) costs occasioned by the
proceedings, the same to be taxed.

XXVI.]

ONTARIO LAW REPORTS.

161

A bill of costs was brought in before the Local Registrar
covering the proceedings before the Police Magistrate, as well
as those at the assizes; but the Local Registrar, upon taxation,
disallowed entirely the costs of the proceedings before the Police
Magistrate, and largely reduced the bill in respect of the costs
incurred at the assizes.

Jones appealed from the taxation.

April 9. The appeal came on for hearing before Middleton,
J., in Chambers.

G. A. Urquhart, for the appellant.

H. S. White, for Constantineau, objected that there was no
appeal from the taxation, as the proceedings were under the
Criminal Code, and the provisions of the Consolidated Rules
did not apply.

April 11. Middleton, J. (after setting out the facts as
above): — I think this objection is well taken. The section of
the Criminal Code under which the order for payment of these
costs was made is sec. 689.* It merely gives authority to direct
payment of costs. Section 1047, f I think, is wide enough to
apply not only to costs ordered to be paid under secs. 1044 and
1045, but to apply to all costs ordered to be paid under any of the
earlier provisions of the Code. This section indicates that where
there is no tariff provided in respect to criminal proceedings,
costs shall be taxed according to the lowest scale of fees allowed
in the Court in which the proceeding is had in a civil suit. Power
is given under sec. 576 to the Court to provide by general rule
for the costs to be allowed; but no tariff has been promulgated
under the Code; and, therefore, the tariff applicable in civil pro-
ceedings, and provided by the Judicature Act and Rules, is
applicable; but under the Code no appeal is given, nor is the
right of appeal which is found in civil cases made to apply by
the mere introduction of the civil tariff.

* 689. If the prosecutor so bound over at his own request does not
prefer and prosecute such an indictment, or if the grand jury does not find
a true bill, or if the accused is not convicted upon the indictment S') pre-
ferred, the prosecutor shall, if the court so direct, pay to the accused person
his costs, including the costs of his appearance on the preliminary inquiry.

t 1047. Any costs ordered to be paid by a court pursuant to the fore-
going provisions shall, in case there is no tariff of fees provided with respect
to criminal proceedings, be taxed by the proper officer of the court according
to the lowest scale of fees allowed in such court in a civil suit.

Middleton, J.

1912

Constan-

tineau

and

Jones.

162

ONTARIO LAW REPORTS.

Middleton, J.

1912

Const an -

TINEAIT

AND

Jones.

[VOL.

Upon the argument it was suggested that another remedy
might be open to the applicant, in so far as the Taxing Officer
has failed to allow anything for the costs incurred upon the
preliminary inquiry.

I am quite clear that, in the absence of any appellate juris-
diction, I have no right to interfere with the discretion of the
officer whose duty it is to tax these costs; but it seems to me
to be equally plain that where the Taxing Officer has failed to
discharge his function at all, and has failed to make any allow-
ance for the costs of the preliminary inquiry, the applicant has
the right to come to this Court to compel the officer to exercise
his function; and it was arranged by counsel that, to save the
expense of another application, this may be treated as a motion
for a mandatory order, and that I should deal with the questions
which would be open upon such an application.

The Taxing Officer has proceeded upon the theory that the
trial Judge did not intend to award the costs of the preliminary
inquiry, and that the language used in the judgment is not suffi-
cient to award these costs. I have had the opportunity of con-
sulting the learned trial Judge, and he tells me that it was his
intention to make an unrestricted award of all costs over which
he had any jurisdiction; and I think that the judgment adequately
awards the costs of the preliminary inquiry.

The formal judgment entered recites the information before
the Police Magistrate and the committal and the notice of dis-
continuance given by the complainant; and the award is “of
the costs occasioned by the said proceedings.”

In the second place, I think that, upon the true construction
of sec. 689, where costs are awarded in general terms, these in-
clude the costs of the appearance on the preliminary inquiry.
The word “including” is equivalent to, “which are to include.”
It would have been well, when the judgment was settled, to have
avoided any question by following the precise words of the
statute; but, when I find that the words are capable of the wider
meaning, and that the learned trial Judge intended his judgment
to have the wider meaning, I have no hesitation in giving to the
words used a meaning which conforms to the actual intention.

The motion thus amended will be dealt with by determining
that I have no appellate jurisdiction, and cannot, therefore, deal

XXVI.] ONTARIO LAW REPORTS. 163

with the appeal, as an appeal; but a mandatory order will go Mld <^on> J -
to the local officer directing him to tax and allow to the applicant 1912
(Jones) his costs of the preliminary proceedings before the Police
Magistrate. As success is divided, I make no award of costs. Constan-

TINEAU

AND

Jones.

[IN THE' COURT OR APPEAL.]

Re Mountain.

Will — Construction — Secured Debts — Postponement of Payment — Accumu-
lation of Income — Exoneration of General Estate — Charitable Gift —
Immediate Vesting — Condition — Gift over to Charity — Rule against
Perpetuities — Restraint on Alienation — Election between Gifts — Ques-
tions for Determination upon Summary Application for Construc-
tion of Will — Costs.

C. A.
1910

Nov. 14.
1912

April 15.

The testator, who died in 1910, by his will, made in 1902, directed that his
just debts and general expenses should be paid as soon as possible after
his decease; but that the payment of debts secured by mortgages on
real estate or for which his bank stock had been temporarily trans-
ferred should be postponed until they had been paid off from the in-
come of his estate; and that none of his bank stock or other securities
were to be sold, but were to be distributed according to their market
value at the time of distribution. He also directed that his real
estate in the Isle of Wight was not to be sold till after a tunnel or
bridge should be made between the island and the mainland, if such
should be made within the lifetime of any of his executors or twenty-
one years after. He then gave all his property to his executors, “after
payment of my just debts and funeral expenses as aforesaid, to be
held in trust for certain purposes specifically set out in a number of
separate paragraphs. The first was, out of the revenue of his property
to pay his wife £150 a year, and to allow her the use, rent free, dur-
ing her life, of “Pinehurst House, furnished, or of whichever house of
mine may be our home at time of my decease.” In the 11th paragraph,
he specified a number of parcels of real estate, and directed that all
these should be conveyed to the Synod of the Diocese of Ottawa to be
held by the Synod in trust for an endowment of the bishopric of Corn-
wall, “whenever the Bishop of Cornwall is being appointed. If the
yearly income from said properties, together with any other official
income from whatever source, be insufficient to produce a salary of
$2,000 a year for a suffragan Bishop or $3,000 yearly for an inde-
pendent Bishop . . . the income of my sixty Hudson Bay shares
. . . or such part ... as may be requisite shall be applied

towards the same object.” Paragraph 12: “But if it be unnecessary for
said purpose so to apply the income of said sixty Hudson Bay shares
. . . I hereby bequeath these . . . shares to the University of
Bishop’s College, Lennoxville ... to found and endow ... a
Mission Fellowship.” Paragraph 19 : “ . . . As soon as the obli-

gations on my personal and real estate have been discharged, including
the payment of $5,000 to the University of Windsor, N.S., for which
I gave ‘my note of hand,’ then all my real estate in” (three specified
places) “shall be transferred to the Synod of the Diocese of Ottawa to
be held in trust for the proposed new Diocese o,r suffragan Bishop of
Cornwall . . . subject to the claim of residence, in one or other of
my houses, of my . . . wife . . . After all existing claims on
my estate real and personal as hereinabove described shall have been
satisfied then the accumulation of all rents shall be safely invested to

164

ONTARIO LAW REPORTS.

[VOL.

form a fund for duly fitting up the house” (describing it) “as a suit-
able residence for the future Bishop of Cornwall . . . Para-

graph 20: “I have made all the above bequests to the suffragan bish-
opric or independent See of Cornwall . . . But if the appoint-

ment ... of such a bishop do not take place within twenty-five
years after my death . . . the properties which had been intended
for the endowment of the See of Cornwall shall also by transfer become
the property of Bishop’s 'College, Lennoxville, subject to” (certain
charges) “and in trust towards the endowment of a Professorship of
Natural Science.” Upon appeal from an order made upon summary
application under Con. Rule 938: — •

Held, that the gift to the Synod was not void as offending the rule
against perpetuities: it was a vested charitable gift, but to be divested
in a certain event, also in favour of a charity.

Held, also, that the income might be applied to the exoneration of the
general estate, to the extent, if any, to which it might be called upon
to answer the secured debts.

Held, as to conditions in the will said to be in restraint of sale of certain
portions of the testator’s estate, and as to the alleged obligation of the
testator’s widow to elect between the gifts to her of a life estate in the
testator’s Cornwall house and in a house in the Isle of Wight, that
the questions submitted could not be determined upon the present
application.

Held, also, that the Court should not disturb the disposition of the costs
made by the order in appeal, by giving the Synod costs as between solici-
tor and client.

Per Moss, 'C.J.O.: — In such cases, the award of costs as between solicitor
and client is generally confined to the applying trustee or executor.

Judgment of Boyd, C., varied.

C. A.
1910

Mountain.

Motion by the executors of the will of the Reverend Jacob
Jehoshaphat Salter Mountain, deceased, upon originating notice,
for an order determining certain questions arising in the admin-
istration of the estate of the deceased, involving the construction
of his will and codicils.

The testator died on the 1st May, 1910. His will was dated
the 25th June, 1902. The material parts of it were as follow: —
lstly. I will and direct that all my just debts and the expenses
of my funeral . . . be fully paid and discharged as soon as
possible after my decease.

Nevertheless the payment of debts secured by mortgages
on real estate, whether in Canada, the Isle of Wight, or elsewhere,
or those for which an equivalent portion of my bank stock has been
temporarily transferred, shall be postponed until they have been
paid off from the income of my estate. And none of my bank
stock or other securities are to be sold, but are to be distributed
according to their market value at the time of distribution.

My real estate in England or the Isle of Wight is not to be
sold till after a tunnel or bridge is made between said Isle and the
mainland (if such should be made within the lifetime of my

XXVI.]

ONTARIO LAW REPORTS.

165

executors or twenty-one years after), after which time it may
be sold, if my executors should consider that such sale would
benefit my estate.

2ndy. I will devise and bequeath to my executors all my
property estate and effects real and personal movable and immov-
able of whatsoever kind or nature and wheresoever situated or to
be found which may belong to me at the time of my decease after
payment of my just debts and funeral expenses as aforesaid to
be held in trust for the following purposes, that is to say: —

1st. Out of the revenue thereof, to pay to my wife Louisa
Mira yearly (for as long a time as she may outlive me, except as
hereinafter provided) one hundred and fifty pounds, the same as
I mentioned in a codicil to my last will which codicil was signed
after our marriage at Shanklin, Isle of Wight, and a duplicate of it
left with her sister Kate, said sum to include her right of dower,
and to be made up partly of what would be a fair rent for my
executors to charge on my property now called “Mira Cottage”
on the Winthrop Highlands, in the suburbs of Boston, Mass. — or
in case of this property being sold, of five per cent, interest on
the proceeds. . . .

She is also to have the use, rent free, during the time of her
natural life, of this “Pinehurst House,” furnished, or of whichever
house of mine may be our home at time of my decease. . . .

2nd. To pay four thousand dollars towards the endowment
of the “Bishop George Jehoshaphat Mountain Memorial Mission
Fund” now in process of formation for the support of Missions
within the territory which now forms the Diocese of Quebec — so
soon as another four thousand dollars shall have been added to
said fund by individual subscribers after my death. . . .

[Then followed a number of small legacies.]

9th. To allow the Rev. S. Gower Poole, or the future Rector
or Rectors of the Church of the Good Shepherd, to reside in the
house now occupied by him, unless Cornwall should become the
See of a Diocese or a suffragan bishopric, in which case I desire
his present abode to become the episcopal residence, when he
(unless he were the chosen bishop) or his successor in office would
have to return to his former residence . . .

10th. Two shares of my Montreal bank stock to be transferred
to the names of “the Rector and Church Wardens of the Church

C. A.
1910

Mountain.

166

ONTARIO LAW REPORTS.

[VOL.

C - A - of the Good Shepherd” and the interest of said shares to be used
1910 for repairs to said Church and the houses thereto belonging.

Re This is to be called “the Church and Church Property repair

Mountain. j ^

fund.

11th. All the property purchased by me from the executors
of the John Purcell estate — also lot No. 2 on Second street, form-
erly known as “the Cattanach property” but now belonging to
me (on which I would recommend the erection of two double
semi-detached houses and one single house) — Also my property
on “First” and “Amelia” streets bordering on or opposite to the
“Central Park” — Also my property No. 2 on Park Avenue
Winthrop Highlands near Boston Mass. U.S. (after the death of
my dear wife, who meanwhile has the profits) — Also the tract of
Prairie land half a mile square more or less, which I hold near
Qu’Appelle, N.W.T. — if still unsold, or, if sold, the proceeds of
the sale — Also my properties in the Isle of Wight, England, if
still unsold, or, if sold, the proceeds of the sale or an equivalent
thereto — All these properties I desire to be legally conveyed to
the Synod of the Diocese of Ottawa to be held in trust by said
Synod for an endowment of the bishopric of Cornwall whenever
the Bishop of Cornwall is being appointed, whether as an inde-
pendent Bishop or as a suffragan to the Bishop of Ottawa. If
the yearly income from said properties, together with any other
official income from whatever source, be insufficient to produce
a salary of two thousand dollars a year for a suffragan Bishop or
three thousand dollars yearly for an independent Bishop, then,
in such case, the income of my sixty Hudson Bay shares (the
certificates of which are now deposited, for safe keeping, with the
Parr’s Bank Limited in the Consolidated Bank Building, Thread-
needle Street, London, E.C., which also receives and places to
my credit account the yearly dividends) or such part of the said
income of these 60 shares as may be requisite shall be applied
towards the same object.

12th. But if it be unnecessary for said purpose so to apply
the income of said 60 Hudson Bay shares (which must in time
become more and more valuable in proportion as the value of
land increases in these territories and which shall not be sold,
nor any of my previously mentioned properties in Cornwall,
during the lifetime of the Rev. Arthur Jarvis or that of any of his

XXVI.]

ONTARIO LAW REPORTS.

167

children now living and twenty-one years after), then in this c - A -

case I hereby bequeath these Hudson Bay shares to the University

of Bishop’s College, Lennoxville, and constitute said corporation Mou ^ AIN
my residuary legatee, so far as said shares are concerned, upon
the following trust and conditions that is to say: To found and
endow in said college a Mission Fellowship whose Fellow shall be
appointed, and his duties assigned as follows . . .

The stipend of the Mission Fellow shall, to the extent of
twelve hundred dollars a year, be the first charge on said Hudson
Bay shares. The Mission Fellow shall be called “The Jacob
Mountain Mission Fellow of Bishop’s College Lennoxville.”

13th. If and as soon as from the above named and other
available sources a larger income than two thousand dollars
annually shall arise and be derived, then I will devise and be-
queath, in such case and as soon as practicable, that one hundred
dollars or whatever portion of it may be in hand be paid yearly
toward the stipend of the Rector or Incumbent of the Mountain
Family Memorial Church of the “Good Shepherd” East Corn-
wall. . . .

19th. It is my desire further that as soon as the obligations
on my personal and real estate have been discharged, including
the payment of five thousand dollars to the University at Windsor,

N.S., for which I gave “my note of hand,” then all my real estate
in Cornwall, Ont., in the Isle of Wight, or, if this should have been
already sold, according to the instructions herein contained, the
proceeds of such sale, and the property in the Winthrop Highlands
near Boston, Mass., U.S., shall be transferred to the Synod of
the Diocese of Ottawa to be held in trust for the proposed new
Diocese or suffragan Bishop of Cornwall, Ont., subject to the
claim of residence, in one or other of my houses, of my dear wife
during the time of her natural life.

Also it is my desire that after all existing claims on my estate
real and personal as hereinabove described shall have been satisfied
then the accumulation of all rents shall be safely invested to form
a fund for duly fitting up the house in which Mr. Poole now
lives, as a suitable residence for the future Bishop of Cornwall . .

20th. I have made all the above bequests to the suffragan
bishopric or independent See of Cornwall (which is to be called
“The Mountain Memorial Bishopric of Cornwall”) in the hope

168

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[VOL.

C. A.
1910

Mountain.

that its northern boundary will be the Ottawa River including
the Island of St. Pierre and all the other islands between the
Cascades and the Island of Montreal.

But if the appointment and consecration of such a bishop
do not take place within twenty-five years after my death, then
and in such case the properties which had been intended for the
endowment of the See of Cornwall shall also by transfer become
the property of Bishop’s College Lennox ville, subject to the
annual payment of said one hundred dollars to the rector
or incumbent of said Church of the “Good Shepherd” and other
bequests herein made chargeable on said property and the privileges
herein conferred and in trust towards the endowment of a Pro-
fessorship of Natural Science. . . .

[The testator then appointed executors and trustees.]

The first codicil was dated the 6th April, 1903, and contained
the following provisions, among others: —

Owing to serious losses and many expenses and disappoint-
ments since Bishop Dunn of Quebec proposed the formation and
endowment of the Bishop George Jehoshaphat Mountain Memorial
Mission Fund — now in process of formation, I am led to reduce,
as I hereby do reduce, my bequest to said fund to one thousand
five hundred dollars, payable by my executors as soon as fifteen
hundred dollars shall have been otherwise contributed towards
said fund, and this within five years after my death. In default
of which said sum being otherwise contributed within said time
said fund shall have no claim on my estate. . . .

I also direct that the five thousand dollars referred to in my
. . will . . as set apart for the benefit of the University
at Windsor, Nova Scotia, be paid by my executors to the
Alumni Association of King’s College, to be held by them in
trust for said University, on condition, etc

The second codicil was dated the 7th August, 1905, and was
as follows: —

Know all men by these presents that I, Rev. Canon Mountain,
D.C.L., D.D., and now of Yarbridge, Brading, Isle of Wight,
England — do hereby assign and make over to my dear wife —
Louisa Mira the use of my Bungalow here situated, together with
that of the adjoining cottage now occupied by Moses Cooper
(after the time of his decease) to have and to hold the same after

XXVI.]

ONTARIO LAW REPORTS.

169

my death, and to receive the rents therefrom during the period A.
of her natural life.

All be it that this codicil, made on the seventh day of August , Re

Mountain,

1905 (nineteen hundred and five) and signed in the presence of
two witnesses within said Bungalow, does not affect the terms and
conditions of my last will and testament of which a copy was left
with my agent R. Smith Esq. the lawyer of Cornwall, Ont. Canada-

The deed of gift contained in this codicil is free from all mort-
gage claims and legacy duties.

The third codicil was dated the 29th May, 1909, and was
unimportant, except as confirming the will and referring to the
testator’s property in the Isle of Wight as his “temporary
residence.”

The questions for determination submitted by the executors
were the following: —

1. What portion, if any, of the estate of the deceased is un-
disposed of by the said will and codicils thereto, and is to be dis-
tributed according to the Statute of Distributions ?

2. What assets or properties of the deceased the said executors
are entitled to convert into cash for the payment of the debts of
the deceased, and as to the validity and effect of the directions
and provisions made in the said will and codicils in restraint of
sale of the various properties of the deceased.

3. The fund from which debts secured by mortgages on real
estate and by transfer of bank stock are to be paid off.

4. The fund or property from which the executors are to pay
off the various general legacies contained in the said will and
codicils and the annuities to his widow and others.

5. How the executors are to dispose of the income and capital
of the Hudson Bay shares mentioned in the said will.

6. What obligations on personal and real estate are referred
to in clause 19 of the said will and what fund the $5,000 bequeathed
to the University at Windsor, N.S., is to be paid from.

7. When and upon the fulfillment of what conditions the prop-
erty devised to the Synod of the Diocese of Ottawa is to be trans-
ferred to the said Synod.

8. What claims on real and personal estate are referred to in
clause 19 of the will, and how and out of what fund the executors
are to satisfy the same, and what is meant by the expression in

12 — XXVI. O.L.R.

170

ONTARIO LAW REPORTS. [vol.

C. A.
1910

Mountain.

clause 19 “ accumulation of rents,” and how the same are to
be applied by the executors.

9. What buildings or erections or repairs the executors should
undertake pursuant to clauses 11 and 19 of the will and the
codicil thereto dated the 6th April, 1903.

10. What houses the widow of the deceased is entitled to oc-
cupy or receive the rents for.

11. The general construction of the will and codicils and the
advice of the Court as to the proper manner of dealing with and
distributing the estate of the deceased.

November 9, 1910. The motion was heard by Boyd, C., in
the Weekly Court at Toronto.

R. Smith , K.C., for the executors.

Glyn Osier, for M. Beatrice Lloyd and Rose McCaskell, two
of the next of kin of the testator.

J. A. Macintosh, for Salter M. Dickinson and others, also
next of kin.

Travers Lewis, K.C., for the Synod of the Diocese of Ottawa.

D. C. Ross, for Bishop’s College, Lennoxville.

November 14, 1910. Boyd, C.: — By carefully spelling out
this complicated will, it appears that the testator provided for
the payment of his obligations by a double process, and for that
purpose divided his debts into two classes: (1) what he calls his
“just debts;” and (2) debts secured by him on land or personalty.

He first provides for the payment of his “just debts” and
funeral expenses as soon as possible after his death, and then makes
the exception that the payment of debts (a) secured on real estate
or (b) those for which his bank stock has been transferred, should
be postponed till they have been paid off from the income of his
estate.

The distinction is again marked when he transfers all his
property to his executors; this is so transferred “afterpayment
of his just debts and funeral expenses,” to be held by them in
trust. He then, in the 11th paragraph, provides for the transfer
of lands in trust to the Synod of the Diocese of Ottawa; but
this is to be read in connection with the 19th paragraph, by which
it is provided that this transfer is to be made as soon as “the
obligations of my personal and real estate have been discharged;”

XXVI.]

ONTARIO LAW REPORTS.

171

and, later in the same paragraph, he says: “ After all existing
claims on my estate real and personal as hereinabove described
shall have been satisfied then the accumulation of all rents shall
be safely invested / ’ etc.

All these indicate and direct a gathering in and application
of income from the whole estate, vested already in the executors,
in order thereout to pay the secured debts, which are, therefore,
not to be paid in ordinary course out of all available assets forth-
with, but to be paid from time to time as the income permits
till all are finally satisfied.

It is uncertain rather in what category the obligation to Wind-
sor University is. By the 19th paragraph of the will, it is classed
with “the obligations on his real and personal estate.” But
the codicil of the 6th April, 1903, would rather go to indicate a
payment at one time. No information has been obtained from
the University as to the nature of the claim which may exist
against the testator, and I can add nothing to what I have said.
My judgment is, that the payment of these secured claims is to
be made out of accruing income of the estate by the executors —
assuming, that is, that the creditors are willing to wait. But,
if the claim is enforced by the creditors, I do not see that the
next of kin have any equity or status to require the executors
to postpone dealing with respect to the other trusts of the estate,
for so long as it might have taken to accumulate enough to pay
all these secured claims in the manner directed by the testator.
The legal rights of the secured creditors would frustrate the delay
contemplated by the testator, but cui bonof Surely for the ad-
vantage of the beneficiaries under the will. The testator’s object
in accumulating the rents is thereout to have the creditors paid;
but the object of accumulation ceases when the creditors enforce
payment out of the general assets in the usual course of adminis-
tration. I think his intention is clear to exonerate the lands and
property charged with debts from the payment of the charges by
the beneficiaries. The general estate is to pay all debts sooner
or later.

As soon as the obligations on the real and personal estate are
satisfied, then the trust arises in respect of the lands. It was
agreed during the argument that an accumulation of income
would be required for about five years in order to pay all these se-

ct A.

1910

Mountain.

Boyd, C

172

ONTARIO LAW REPORTS.

C. A.
1910

Mountain.

Boyd, C.

[VOL.

cured debts thereout. The lands are then to be conveyed to the
Synod of the Diocese of Ottawa, to be held in trust for the endow-
ment of a suffragan bishopric of Cornwall. But, the will pro-
ceeds, if the accomplishment of the said suffragan bishopric is
long delayed ... if the appointment and consecration of
such Bishop do not take place within twenty-five years after my
death, then the properties intended for the endowment of the
See of Cornwall shall by transfer become the property of Bishop’s
College, Lennoxville.

The will was made on the 25th June, 1902, and the last codicil
confirming his will was made on the 29th May, 1909, and the
testator died, in the Isle of Wight, on the 1st May, 1910. The
appointment of any Bishop for a Diocese of Cornwall has not
yet taken place — though some steps have been taken towards the
establishment of a coadjutor bishopric in that locality. But the
matter has in no sense reached that point of completion required
by the testator. The question is, whether the trust to convey
by the executors of the testator is to remain in abeyance for twenty-
five years from his death or for such lesser period as may elapse
before a coadjutor or suffragan Bishop has been appointed and
consecrated for the new See of Cornwall, or is it a void bequest
by reason of infringing the rules against remoteness? Even if
the conveyance to the Synod was not to be made till the Bishop
was appointed, it may be persuasively argued that the testator
was aware of the condition of his estate, and contemplated that
some five years would elapse from his death before the lands were
to be taken out of the hands of the executors — they holding them
under the trust to satisfy, first, the secured creditors before the
claim of the Synod arose. Thus, in the view of the testator, five
years would be occupied in clearing the real estate, and only an
interval of twenty years would be the period of suspense as to
whether or not a Bishop should be appointed. That length of
time would not be objectionable in point of remoteness.

But I prefer that reading of the will which would call for the
conveyance of the lands to the Synod forthwith upon the satis-
faction of the secured debts — by that body to be held in trust
expectant upon the episcopal appointment for the period of
twenty-five years from the testator’s death — with provision for
the transfer of the lands by the Synod to the Lennoxville College,

XXVI.]

ONTARIO LAW REPORTS.

173

if no Bishop had been duly appointed before the end of the twenty- c - A -
five years.

The language of the testator permits of this construction, Mou ^ AIN
and the Court will be slow to seek to frustrate his general charitable

Boyd, C.

purpose.

All the real and personal estate is vested in the executors to
hold in trust ... for the purpose, as to the lands mentioned,
of being “ legally conveyed to the Synod of the Diocese of Ottawa
to be held in trust by said Synod for an endowment of the bishopric
of Cornwall whenever the Bishop of Cornwall is being appointed”

(sic ) .

Again, in paragraph 20, he adverts to this trust conferred by
the earlier clause on the Synod of Ottawa, in this way: “If the
appointment ... of such a Bishop do not take place within
twenty-five years after my death, then and in such case the proper-
ties which had been intended for the endowment of the See of Corn-
wall shall also by transfer become the property of Bishop’s College,

Lennox ville.” That is, as I read it, the then trustees for the
Synod shall, at the end of the twenty-five years (if no Bishop is
appointed), transfer what they hold to the trustees of the college
“in trust towards the endowment of a Professorship of Natural
Science.”

In brief, after payment of the secured debts, the real estate
held in trust is to be conveyed in fee simple to the Synod, subject
to be divested if a Bishop is not appointed in twenty-five years, in
favour of the college.

Here is found an immediate gift for charitable uses, delayed
as to the actual conveyance till the secured debts are paid, and,
therefore, vested at the death and effective in law, though the
particular application of the gift may be in suspense for twenty-
five years or may never take effect at all — in which contingency
there is a valid transfer to another charity at the end of the twenty-
five years. Chamberlayne v. Brockett (1872), L.R. 8 Ch. 206,
lays down the general principle, and there is a particular applica-
tion of it in In re Swain, [1905] 1 Ch. 669, which is much in point
as to the scheme of this will.

The disposition of the lands to the first charity (the Synod)
being valid, the provision for the transfer in certain events to the
second charity (the college) is also a valid charitable bequest:

174

C. A.
1910

Mountain.
Boyd, C.

ONTARIO LAW REPORTS. ' [vol.

Christ’s Hospital v. Grainger (1848-9), 16 Sim. 83, affirmed 1
Macn. & G. 460.

The testator had sixty Hudson Bay shares of considerable
value, which are held by the executors in trust for the payment of
debts as aforesaid. I have considerable doubt as to their future
disposal. They are mentioned specifically in connection with the
endowment of the new bishopric and the lands intended therefor.
The will reads (paragraph 11): “If the yearly income . . .

together with any other official income from whatever source, be
insufficient to produce a salary of $2,000 a year for a suffragan
Bishop . . . then, in such case, the income of my Hudson

Bay shares . . . or such part of the said income . . .

as may be requisite shall be applied towards the same object."
Paragraph 12: “But if it be unnecessary . . . so to apply

the income of said 60 Hudson Bay shares . . . then . . .

I hereby bequeath these . . . shares to the University of

Bishop's College . . . and constitute said corporation my

residuary legatee, so far as said shares are concerned, upon the
following trusts and conditions" ( i.e ., to found a Mission
Fellowship, etc.).

I incline to think that the shares, after debts satisfied, are to
be held by the Synod of the Diocese to accumulate the income
for the purposes of the expected endowment of the new bishopric;
and, if and when that is established, within the twenty-five years,
to apply the accumulated as well as the yearly accruing income
in payment of the salary named. If there is a surplus, or the
bishopric is not created within the period, then that surplus or
the shares themselves are to be transferred to Bishop’s College.
That is to say, the final beneficiary takes in subordination to the
prior beneficiary, and only so much as can be called “residue"
after the just claims for the endowment are satisfied. This con-
struction is warranted, I think, by the exceptional rule which
obtains in favour of charities, viz., that it is preferable to give
effect to the general intention of the testator, though the detail
be incomplete, than to declare an intestacy. The testator means
to allocate all these Hudson Bay shares (income and capital)
to one or other of the named charities: In re White, [1893] 2 Ch. 41.

The restraint upon the sale of the Isle of Wight land till a tun-
nel is made between the Isle and the mainland, if such should be

XXVI.]

ONTARIO LAW REPORTS.

175

made within the lifetime of any of the executors or twenty-one
years thereafter, would appear to be an illegal provision under
In re Rosher (1884), 26 Ch.D. 801, followed and approved of in
Blackburn v. McCollum (1903), 33 S.C.R. 65.

These were all the points before me, and counsel agreed that
the disposal of these would sufficiently clear the way for proceeding
with the administration of the estate; and I answer them as above
indicated.

Costs out of the estate.

C. A.
1910

Mountain.

Boyd, C.

Salter M. Dickinson and others, some of the next of kin of
the deceased, appealed (by leave) directly to the Court of Appeal
from the judgment of Boyd, C.

November 22, 1911. The appeal was heard by Moss, C.J.O.,
Garrow, Maclaren, Meredith, and Magee, JJ.A.

J. A. Macintosh , for the appellants. The learned Chancellor
should have held that, if the executors were obliged to pay the
debts, or any of them, secured on real or personal estate, otherwise
than out of income, then to the extent that such debts are paid
otherwise than out of income, the amount so paid should be re-
stored to the estate out of accumulation of subsequent income.
The devise and bequest to the Synod of the Diocese of Ottawa is
made upon a condition or conditions which need not be performed
within the limits allowed by the rule against perpetuities, and is
therefore void: Cherry v. Mott (1835), 1 My. & Cr. 123; Chamber-
lay ne v. Brockett, L.R. 8 Ch. 206, at p. 212; In re Lord Stratheden
and Campbell, [1894] 3 Ch. 265; In re Bewick, [1911] 1 Ch. 116.
If the devise and bequest to the Synod of the Diocese of Ottawa
is void, the devise and bequest to the University of Bishop’s
College, Lennoxville, which is dependent on the validity of the
devise and bequest to the Synod, is also void, and the property
covered by it becomes part of the undisposed of estate: Robinson
v. Hardcastle (1786), 2 Bro. C.C. 22; Brudenell v. Elwes (1801),

1 East 442; Beard v. Westcott (1813), 5 Taunt. 393; Monypenny
v. Bering (1852), 2 D.M.&G. 145; Routledge v. Dorril (1794),

2 Ves. Jr. 356.

Glyn Osier, for M. Beatrice Lloyd and Rose McCaskell, next of
kin, in the same interest as the appellants. The learned Chan-
cellor’s order declares that in case the executors are obliged to

176

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[VOL.

C. A.
1911

Mountain.

pay any portion of the secured debts before receiving sufficient
income out of which to pay them, they are to pay them out of the
undisposed of corpus of the estate, which is not to be replaced
from subsequent income. This declaration is contrary to the
express intention of the will, namely, that when the time for dis-
tribution of the corpus should arrive the corpus should be intact,
the debts and charges having been discharged out of income.
The testator’s general intention was to postpone payment of the
substantial legacies and bequests until the discharge of his debts
out of income. If any creditors whose debts are due refuse to
wait, the beneficiaries should not thereby become entitled to re-
ceive their legacies before the debts have been paid or provided
for out of income. In case the executors are required to pay
debts of an amount exceeding the income in hand, at the time
payment is demanded, their duty is either to raise the necessary
fund by charging upon the estate or to replace the corpus tem-
porarily used to discharge the debts. If subsequent income can-
not be used to replace moneys provided to meet a deficiency, then,
the fund indicated for payment having partly failed, the devisee
must take the real estate subject to the unpaid portion of the charg-
es and incumbrances against it: Wills Act, R.S.O. 1897, ch. 128,
sec. 37; Rodhouse v. Mold (1866), 35 L.J. Ch. 67. I adopt the
argument of counsel for the appellants that the devises and be-
quests to the Synod and to Bishop’s College are void under the
rule against perpetuities under the authorities cited by him.

Travers Lewis, K.C., and J . W. Bain, K.C., for the Synod of
the Diocese of Ottawa. The gift to the Synod is a vested gift,
to which the rule against perpetuities cannot be applied: Chamber-
lay ne v. Brockett, L.R. 8 Ch. 206, at p. 210; In re Swain, [1905]
1 Ch. 669. The gift being to a charity, the gift over is also good,
as the rule is not applied to such a case: Christ’s Hospital v.
Grainger, 16 Sim. 83, 1 Macn. & G. 460; Wallis v. Solicitor-General
for New Zealand, [1903] A.C. 173, at p. 186; Theobald on Wills,
7th ed., p. 367; Re Gyde (1898), 79 L.T.R. 261; Attorney-
General v. Bishop of Chester (1785), 1 Bro. C.C. 444. In
case the executors are obliged to pay any of the secured debts
before sufficient income shall be received by them, they are en-
titled to pay the same out of the undisposed of corpus of the
estate, and in such event the portion of the corpus so expended

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177

is not to be replaced from subsequent income : Metcalfe v. Hutchin - c - A -

son (1875), 1 Ch.D. 591, at p. 594; Theobald on. Wills, 7th ed.,
pp. 834 and 836; Adamson v. Armitage (1815), 19 Ves. 416; Page Mou ^®
v. Leapingwell (1812), 18 Yes. 463; Haig v. Swiney (1823), 1 Sim.

& Stu. 487; In re L’Herminier, [1894] 1 Ch. 675; Wharton v.
Masterman, [1895] A.C. 186; Mannox v. Greener (1872), L.R. 14
Eq. 456, 462; Morrow v. Jenkins (1884), 6 O.R. 693. The re-
straint upon the sale of the property in the Isle of Wight and of
the properties in Cornwall and the Hudson Bay shares is an
illegal restraint: Blackburn v. McCollum, 33 S.C.R. 65. The
widow is not entitled to the use of the testator’s house in
Cornwall if she accepts the devise to her of the testator’s bungalow
in the Isle of Wight and the cottage adjoining it. The Synod
should be paid their costs as between solicitor and client: Re
Fleming (1886), 11 P.R. 272, 285, and cases there cited.

D. C. Ross, for Bishop’s College, Lennoxville. The Hudson
Bay shares should be transferred to the college after payment of
the debts and charges mentioned in the third paragraph of the
judgment, or be held in trust by the trustees of the will and the
income paid to the college until such time as the suffragan Bishop
of Cornwall is appointed, and it is ascertained that his salary
requires to be augmented from the income of these shares. If the
devise and bequest to the Synod of the Diocese of Ottawa be held
void for remoteness, the same became vested in or was transferred
to the college, which is a charity in esse ; or, there being a general
charitable intention, on failure of one mode, the other indicated
should take effect in favour of the College. See Taylor’s Equity,
pp. 176, 177; Going v. Hanlon (1869), 4 Ir. R.C.L. 144.

R. Smith, K.C., for the executors, submitted his clients’ rights
to the Court.

Macintosh, in reply. In the Christ’s Hospital case, cited by
the respondents, the first bequest was a valid one. But I deny
that if the devise to the first charity is invalid, and the second
offends against perpetuities, it is valid because it follows another.

See In re Bowen, [1893] 2 Ch. 491; Theobald on Wills, 7th ed.,
p. 373. On the question of the validity of the gift, see Worthing
Corporation v. Heather, [1906] 2 Ch. 532, at p. 538.

April 15. Moss, C. J.O. : — This is an appeal by certain of the
next of kin of the testator, the Rev. Jacob Jehoshaphat Salter

178

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C. A.
1912

Mountain.

Moss, C.J.O.

Mountain, D.D., from the judgment pronounced by the Chancellor
of Ontario upon two of several questions raised by the executors
and executrix of the will under Con. Rule 938, as enacted by
Con. Rule 1269. The questions were: whether, if the executors
were obliged to pay debts or any part of debts secured on the
testator’s real or personal estate otherwise than out of income,
the amount so paid should be restored to the estate out of subse-
quently accumulated income; and whether or not the devise and
bequest contained in the will to the Synod of the Diocese of Ot-
tawa is void as offending the rule against perpetuities.

The learned Chancellor determined both these questions ad-
versely to the contention of the appellants, who are supported in
the appeal by others in the same interest. Other questions were
discussed by counsel for the Synod of the Diocese of Ottawa
during the argument; but, if they are at all proper to be disposed
of upon a proceeding of this kind, they seem not to be ripe for
determination at present.

The main question is, of course, whether the devises and be-
quests to the Synod are void under the rule against perpetuities.

The will, which, with three codicils, deals with and purports
fully to dispose of the testator’s estate, is a very long and intricate
instrument, containing many complicated and involved provisions
and directions, due to some extent, no doubt, to the testator’s
evident fondness for and tendency to minute detail and his desire
to leave nothing unprovided for in the final disposition of his
estate. And it is apparent that he must have felt satisfied that
he had effectively disposed of all he possessed, for there is no
residuary clause.

His whole estate, real and personal, is said to be of the value
of about $99,000. There were debts which he appears to have
divided into two classes, and which it was his desire should be
treated differently or at least regarded in a different way by his
executors in the administration of his estate : (a) ordinary current
debts, which he calls his “just debts;” and (b) debts secured by
him on lands or personalty, among which he seems to have in-
cluded a liability of $5,000 to the University at Windsor, Nova
Scotia, for which, he says, he gave his “note of hand.” ,

He desired the first class, together with his funeral expenses,
to be paid as soon after his death as possible. His intention with

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regard to the other class was to postpone payment so far as to
enable them to be paid off from the income of his estate. He
could not, of course, control the action of the creditors, in case
they were not willing to wait after their claims became payable.
Beyond this, he gives no specific directions to his executors with
regard to the payment of these debts, except what is to be gathered
by inference from the 19th paragraph of the will, and the direction
in the first codicil as to the payment by the executors of the $5,000
to the Alumni Association of King’s College, instead of directly
to the University of Windsor. This latter direction is quite
consistent with the payment of the amount in one sum out of the
general estate, instead of out of income. By the 11th paragraph
of the will, the. testator gives directions for the conveyance of the
properties there mentioned, and the proceeds of any that may
have been sold, to the Synod of the Diocese of Ottawa, to be held
by it in trust for the endowment of the bishopric of Cornwall,
only delayed, if at all, by virtue of what is provided in the 19th
paragraph of the will. But I do not think that these provisions
were intended to affect or do affect the vesting in the Synod of
Ottawa of an immediate estate or interest for the purposes
designated in the 11th paragraph. The two paragraphs must
be read together, and, so read, they are found to contain, as the
learned Chancellor expresses it, “an immediate gift for charitable
uses, delayed as to the actual conveyance till the secured debts
are paid, and, therefore, vested at his (the testator’s) death.”

Here the gift to the Synod for the charitable purposes ex-
pressed is not conditional upon the payment of the debts out of
the income. The gift takes immediate effect, whichever way
the debts may be paid. In the recent case of In re Bewick, [1911]
1 Ch. 116, much relied upon by the appellants, there was no gift
to the children living and the issue of any that might have died nor
any vesting in them of any beneficial interest until all the testator’s
real estate should be clear of all charges thereon — a wholly un-
certain event which might operate to postpone the period of vesting
beyond that prescribed by the rule against perpetuities. I agree
with the construction which the learned Chancellor has placed
upon this will as regards this branch of the case.

As to the application of income to the exoneration of the
general estate, to the extent, if any, to which it may be called upon

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[VOL.

to answer the secured debts, I am, with deference, unable to per-
ceive any reason why that should not be the case. It is very
apparent that, while the testator was anxious, if possible, to free
the incumbered estates by the application of income, he had no
intention that they should be freed at the expense of the general
estate; and I think the judgment should be varied in this respect.

We were asked by counsel for the Synod to pronounce upon a
number of other points. One was with regard to a further declara-
tion as to conditions which he submitted were in restraint of sale
of the testator’s Cornwall property and Hudson Bay shares
This may or may not depend upon circumstances, and could
properly arise only in administration proceedings. So with
regard to the alleged obligation of the testator’s widow to elect
between the gifts to her of a life estate in the testator’s Cornwall
house and one in the Isle of Wight. The facts are not sufficiently
developed to enable any proper conclusion to be arrived at on this
question. Then, as to the claim that the Synod should be paid
its costs as between solicitor and client, the rule does not extend
in general beyond the applying trustee or executor, and we could
not interfere with the order as it now stands in this respect.

Except as indicated, I would affirm the judgment appealed
from, the directions of which appear quite sufficient to enable all
the matters dealt with by the learned Chancellor to be properly
worked out.

As to costs, the appellants have failed as to the substantial
part of their appeal, and should pay the costs of the respondents
who are adverse in interest to them. The executors’ costs, as
between solicitor and client, may be paid out of the estate.

Meredith, J.A. : — This matter seems to me to be within
quite a narrow compass ; and easy to be determined if approached
in the right way.

Our duty is not to endeavour to wreck this will upon the
shoals of technicality, or upon any rock of inexorable rule of law,
but rather to guide it through such obstacles, and to give effect
to the testator’s intentions, expressed in it, if, by any lawful
means, that can be done, and, for that purpose, to take a compre-
hensive view of the will, not to search for, and stumble at, minute
seeming contradictions or uncertainties; and that duty can, I
think, be accomplished without any sort of serious difficulty.

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181

I am unable to perceive any substantial reason why the
gift to the Synod may not be considered a vested gift, to which
the rule against perpetuities cannot be applied; and once vested
the estate may last indefinitely without offending the rule; and,
the gift being a gift to a charity, and the gift over to another
charity, the gift over is also good, as the rule is not applied to such
a case: see In re Tyler , [1891] 3 Ch. 252. In this respect this
matter comes within the authority of Chamberlayne v. Brockett,
L.R. 8 Ch. 206, and not within that of In re Lord Stratheden and
Campbell, [1894] 3 Ch. 265, in which the gift was made upon a con-
dition that might never happen; in this case the gift was vested,
but to be divested in a certain event. The intention was not to
give only in the event of the creation of the new see; that would
be to frustrate, rather than to further, the testator’s object, an
object which was dear to his heart. He knew that that could
hardly be accomplished without the means which he was provid-
ing, and possibly might not be, even with them; and so the means
were given presently, but to be withdrawn if the bishopric were
not an accomplished fact within the twenty-five years. The
parenthetical restriction, contained in the 12th item of the will,
may, I think, be considered an attempt to restrain alienation;
whether valid or not is immaterial upon this the main question
in the case.

The pro vision % for the payment of debts out of the income
does not aid the appellants in this respect, nor would it, if it de-
layed the beneficiaries having the benefit of,, the gifts to them,
beyond the perpetuities’ period; for a trustee in such a case holds
in trust for the beneficiary, subject to the payment of the debts:
Bacon v. Proctor (1822), T. & R. 31.

If creditors will not wait, or if the beneficiaries are willing
to pay off all charges against their properties, I cannot understand
why the simple method adopted in the case of Bacon v. Proctor
should not be followed; or, in any case, why the money to pay off
pressing creditors may not be raised upon the estate in such a
manner as will put the new creditors in precisely the same position
as the old creditors, and so leave this matter, substantially, pre-
cisely as the testator left it by his will: and, I think, this should
be done. But, whatever course may be adopted, the burden

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[VOL.

ought to be made to fall, in all respects, just as it would under
the will, if possible, and, if not possible in all respects, then as nearly
so as possible.

Questions of restraint on alienation do not seem to me to be
proper subjects of an application such as this. An expression
of opinion upon such an application would be of no useful binding
effect; upon proceedings between vendor and purchaser such a
question would properly arise and a judicial opinion be effectual.
An opinion now expressed would be especially out of place, in my
opinion, in regard to the land in the Isle of Wight: I, therefore,
refrain from expressing any opinion upon these questions.

The question whether the widow is entitled to Pinehurst
House, as well as to the Bungalow, depends entirely upon the
question of fact, whether, at the time of the testator’s death,
Pinehurst House was his and was also the home of his wife and
himself. Each gift is for life; there is no restriction upon that of
the Bungalow, but in regard to Pinehurst House his will is: “She
is also to have the use, rent free, during the time of her natural
life, of this ‘ Pinehurst House/ furnished, or of whichever house of
mine may be our home at time of my decease.” So that,
though the widow certainly takes the Bungalow, she loses Pine-
hurst House if at the time of the testator’s death the Bungalow
were “our home,” for it was unquestionably a “house of mine.”
In the codicil of the 29th May, 1909, the last codicil, the testator
refers to his property in the Isle of Wight as his “temporary
residence.”

There is no sufficient ground upon which the disposition of
the costs of the application can be disturbed; but the appellants
ought to pay the general costs of this appeal, the substantial
question being the validity of the gifts to the charities.

G arrow, M acl aren, and Magee, JJ.A., concurred.

Judgment below varied.

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[IN THE COURT OF APPEAL.]

Merchants Bank of Canada v. Thompson.

Promissory Note — Indorsement to Bank by Customer before Maturity —
Purpose of — Collection or Collateral Security — Lien of Bank for
Amount Oioing by Customer — Fresh Indebtedness when Note Overdue
— Failure of Consideration between Original Parties — Purchase of
Share in Partnership — Part Failure of Consideration.

The judgment of a Divisional Court, 23 O.L.R. 502, was reversed and the
judgment of Boyd, C. restored; Maglaren, J.A., dissenting.

Per Moss, C.J.O. : — Even if the promissory note sued on was indorsed to
the plaintiffs merely for collection, and not as collateral security, the
plaintiffs were still entitled to the judgment awarded to them by Boyd,
C. As indorsees for collection, they were entitled to a lien on the
note for debts that were then presently payable and from time to time
thereafter becoming payable. When the note was received by the
plaintiffs, it was a note for good consideration, not overdue. The de-
fendants became parties to the note as sureties for L. upon a trans-
action between him and F. for the acquisition by L. of a half share in
the business of F. and the formation of a partnership between them.
The partnership was in fact created; and its subsequent termination
would not bring about a total failure of consideration so as to affect
the validity of the note in the hands of either F. or the plaintiffs.
Upon taking the partnership accounts, L. might be able to shew himself
entitled to a return of part of the premium; but it was for the defend-
ants to shew this, if they wished to avail themselves of the defence
of part failure of consideration; and they had not shewn it.

Per Meredith, J.A. : — The proper conclusion upon the facts is, that the
note was taken and always held by the plaintiffs as security for the re-
payment of all that might from time to time be owing by F. to the
plaintiffs. And, that being so, the note was good, in the< plaintiffs’
hands, against the makers of it, for the amount of the indebtedness of
F. to the plaintiffs; the fact that at some times there was nothing
due from F. to the plaintiffs would not cut out that right or deprive
the plaintiffs of the position of a holder in due course; there would
not be by implication a new transfer of the note as security for each
separate indebtedness or advance; there would be but the one trans-
action, to which all changes in the account between F. and the plain-
tiffs would be referable; everything would relate back to the one transfer
made while the note was current; although it was competent for F.
to take up the note at any time when there was no obligation on his
part to the plaintiffs.

Atwood v. Crowdie (1816), 1 Stark. 483, followed.

Per Maclaren, J.A. : — The note was left with the plaintiffs “for what it
was worth,” without any special pledging or hypothecation; and the
right which the plaintiffs had under their banker’s lien was the right
to retain the note for any debt due to them; they had no right to
retain it for any liability not yet due or payable. The legal position of
the plaintiffs was the same as though they had returned the note to
F. when there was nothing owing by him, and he had redelivered it to
them when he again became indebted to them, it being then overdue,
and so taken subject to all the equities between the makers and F. ;
and there was such a failure of consideration as between F. and L. as
would prevent the plaintiffs from recovering.

Atwood v. Crowdie, supra, explained.

An appeal by the plaintiffs from the judgment of a Divisional
Court, 23 O.L.R. 502.

C. A.
1912

April 15

184

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Merchants
Bank of
Canada

Thompson.

ONTARIO LAW REPORTS. [vol.

January 16 and 17. The appeal was heard by Moss, C.J.O.,
Garrow, Maclaren, Meredith, and Magee, JJ.A.

J. F. Orde, K.C., for the plaintiffs. There^was not a total
failure of consideration. Living got what he agreed to pay’ for:
Lindley on Partnership, 7th ed., p. 626. The failure of con-
sideration (if any) was at most but partial, entitling Living to
a partial return of his premium: Chalmers on Bills of Exchange,
7th ed., p. 108; Kilroy v. Simkins (1876), 26 C.P. 281. The
note was, prior to its maturity, pledged to the bank as collateral
security for advances theretofore made and thereafter to be
made to Fox. Consequently, notwithstanding that the loans to
Fox were from time to time paid off, the plaintiff s’ right to the
security would attach from the date of the pledge, September,
1907; Atwood v. Crowdie (1816), 1 Stark. 483. But the plaintiffs’
right to recover does not depend upon an express pledging of
the note. The plaintiffs, in any event, held the note for collec-
tion, and were consequently entitled to exercise their banker’s
lien, which has the effect of creating a pledge without any con-
scious pledging: Paget on Banking, 2nd ed., pp. 297, 298; Grant
on Banking, 6th ed., pp. 301 and 305; Hart on Banking, 2nd ed.,
p. 744; Brandao v. Barnett (1846), 12 Cl. & F. 787; and by
virtue of their lien they became holders for value and are en-
titled to recover to the extent of the lien: Bills of Exchange
Act, sec. 54; Maclaren on Bills, 4th ed., pp. 174, 175; Falcon-
bridge on Banking, pp. 449 et seq.; Chalmers on Bills of Exchange,
7th ed., pp. 93 et seq. No state of facts has been shewn by the
defendants which constituted an “ equity attaching to the note”
or rendered Fox’s title defective within the meaning of sec. 70
of the Bills of Exchange Act: Oulds v. Harrison (1854), 10 Ex.
572; In re Overend Gurney <& Co., Ex p. Swan (1868), L.R. 6
Eq. 344. The cases of Holmes v. Kidd (1858), 3 H. & N. 891,
and Ching v. Jeffery (1885), 12 A.R. 432, are clearly distinguish-
able from the present case. What took place in both these cases
amounted in effect to payment or part payment, and the amount
was in each case liquidated and ascertained. The appellants also
rely upon the reasons given by the Chancellor and Mr. Justice
Britton.

Travers Lewis, K.C., and J. W. Bain, K.C., for the defen-
dants. The note represented the purchase-price of a half share

XXVI.]

ONTARIO LAW REPORTS.

185

in Fox’s manufacturing agencies, which half share Living never
got; and, consequently, the consideration for the note wholly
failed. Section 54 of the Bills of Exchange Act, relied upon by
the learned trial Judge, we submit, does not extend to the case
of a dishonoured note: Hart on Banking, 2nd ed., p. 480; Giles
v. Perkins (1807), 9 East 12; Thompson v. Giles (1824), 2 B.
& C. 422; Dawson v. Isle , [1906] 1 Ch. 633, 637. The evidence
shews that the note was deposited for collection only. There
is no doubt that the defendants were sureties; and the bank
manager, after the note matured, must have known that such
was the case. The note was repledged after maturity, and the
bank had no property in it, but only a lien at most, under sec. 54
of the Bills of Exchange Act. As soon as the indebtedness of
Fox was wiped out, the lien was discharged; and, when a new
lien accrued, it would be subject to the intervening equities:
Chalmers on Bills of Exchange, 6th ed., p. 120. Sections 54 and
70 of the Bills of Exchange Act ought not to be read together :
Falconbridge on Banking and Bills of Exchange, pp. 477, 478;
Ching v. Jeffery, 12 A.R. 432, especially at pp. 434, 436; Polak
v. Everett (1876), 1 Q.B.D. 669, per Blackburn, J., at p. 674;
Britton v. Fisher (1867), 26 U.C.R. 338, at pp. 339, 340. The
evidence shews that there was a binding agreement by Fox to
give time to Living; and the learned trial Judge erred, we sub-
mit, in thinking that there was no sufficient variation to alter
the position of the parties: Canada Permanent Loan and Savings
Co. v. Ball (1899), 30 O.R. 557, and particularly at pp. 568, 572,
573, and the authorities there collected; Bonar v. Macdonald
(1850), 3 H.L.C. 226, 238. Making an agreement with the
principal debtor for 8 per cent, interest on the overdue note
is a giving of time sufficient to discharge the sureties: Blake v.
White (1835), 1 Y. & C. (Ex.) 420, 426; DeColyar on Guarantees,
3rd ed., pp. 422, 424; Brandt on Suretyship (1905), vol. 1, secs.
389, 394; Lime Rock Bank v. Mallett (1856), 42 Me. 349, 358;
Rowlatt on Suretyship (1899), p. 245. On the point of banker’s
lien, see Lloyd v. Davis (1824), 3 L.J.O.S.K.B. 38; Falconbridge
on Banking, p. 460, and cases there cited. The respondents also
rely on the reasons given by the Chief Justice of the King’s Bench.

Orde, in reply.

April 15. Moss, C.J.O.: — This is an appeal by the plaintiffs

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Bank of
Canada
v.

Thompson.

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Bank of
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v.

Thompson.
Moss, C.J.O.

[VOL.

from a judgment of a Divisional Court reversing (Britton, J.,
dissenting) a judgment of the Chancellor of Ontario at the trial
without a jury.

The case is reported in 23 O.L.R. 502, where the facts are
fully stated in the judgment of the Chief Justice of the King’s
Bench.

The plaintiffs sue as the holders of a promissory note for
$2,000 made by one A. H. Living and the defendants in favour
of one C. H. Fox, and by him indorsed to the plaintiffs’ order.
The note is in form joint and several. The action was brought
against the two defendants alone, and no steps were taken by
them to bring or cause the plaintiffs to bring Living and Fox
into the action.

They were, of course, not bound to do so unless they con-
sidered it material to their defence; but, in one aspect of the
case, it might have been to their advantage to have had them
before the Court.

The defences relied upon, as shewn by the record upon which
the parties went to trial, as well as those afterwards permitted
to be set up, are set forth on p. 508 of the report.

As regards the answers to the action alleged in the first para-
graph of the original defence and repeated in substance in two
paragraphs of the further defences, viz., an agreement for exten-
sion of time and neglect to give notice of dishonour to the de-
fendants, there is no difference of opinion between the trial Judge
and the Divisional Court. These defences failed for lack of
proof that the plaintiffs had notice that the defendants were
' sureties for Living.

The other defences, viz., that the note was made without
consideration and was indorsed to the plaintiffs without con-
sideration and after maturity; that the consideration for the
note as between Fox and Living failed, and that at the time of
the commencement of the action the plaintiffs’ title was no higher
than Fox’s, and the note was held subject to the existing equities
between him and Living, are those upon which the differences
of opinion have arisen. It is now beyond question, upon the
evidence, that the defendants became parties to the note as
sureties for Living upon a transaction between him and Fox
for the acquisition by the former of a half share or interest in

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187

the business of manufacturers’ agent carried on by Fox in the
city of Vancouver, and the formation of a partnership between
them in the business. The nature of the transaction is to be
gathered from the evidence of these parties and the memorandum
of agreement signed by them. In effect, it was the not unusual
transaction of a person purchasing his way into an established
business, paying a bonus or premium to the owner, and entering
into partnership with him, upon terms arranged between them.

The bonus or premium to be paid was $2,000; but, as Living
was unable to provide the money, and Fox was willing to accept
the promissory note of the defendants, Living prevailed upon
them to join him in the note in question. It is dated the 1st
July, 1907, payable three months after date, and therefore fell
due and payable on the 4th October, 1907. It was received by
the plaintiffs from Fox on the 12th September, 1907, and has
been in their possession ever since.

At the time when the note was received, the plaintiffs had
under discount a note for $500 made by Fox dated the 4th Sep-
tember, payable in thirty days, but beyond this he was not in-
debted to the plaintiffs.

There is upon the testimony a far from satisfactory account
of the terms or conditions under which the note was left with the
plaintiffs. Fox was positive that it was left for collateral and
collection. The plaintiffs’ manager would not use the term
“collateral.” He said it was left “for what it was worth;” and
the records shew that it was entered in the collection and not
in the collateral register. The learned Chancellor found as a
fact that it was left as collateral security and also for collection;
while, in the Divisional Court, the learned Chief Justice said
that, notwithstanding Fox’s evidence, the impression made upon
him was that the note was indorsed to the plaintiffs merely for
collection, and not as collateral. The conclusion I have reached
upon the question of consideration renders it unnecessary finally
to decide between these conflicting views; but, on the whole,
I incline to the latter. Even so, in my view, it still leaves the
plaintiffs entitled to the judgment awarded to them by the Chan-
cellor.

As indorsees for collection of the note, they were entitled to
a lien on it for debts that were then presently payable and from

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Bank of
Canada
v.

Thompson.

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[VOL.

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Merchants
Bank of
Canada
v.

Thompson.

Moss, O.J.O.

time to time thereafter becoming payable. The claim now made
is in respect of an indebtedness of Fox which became payable
from and after the 24th November, 1908. Prior to that date,
there was a period> in which Fox was free from direct indebted-
ness, although there were some outstanding notes or drafts under
discount; a time during which, according to the plaintiffs’ mana-
ger, Fox was at liberty to take the note out of the plaintiffs’
possession had he chosen. But Fox did not take it away, and
it remained with the plaintiffs until the debts now due and pay-
able had accrued. And, unless something had occurred between
Fox and Living prior to the 24th November which furnished the
latter with a defence to an action on the note, the plaintiffs are
entitled as holders to a lien for the amount of Fox’s indebtedness
to them.

The defence set up is want of consideration and total failure
of consideration. Upon the evidence, it seems to me to be plain
that there was good consideration for the note when it was given.
Living obtained an interest in Fox’s agency business which he
then had and which he might thereafter acquire, and became
a partner on equal terms with Fox. He was and acted as a
partner for at least fifteen months, during which time he says
he earned or become entitled to several thousand dollars as
profits, and actually received about $1,000 for his own use. He
was known to at least some of the customers or persons with
whom or on whose behalf he and Fox executed commissions, and
drafts in the firm name had been drawn upon some of them.
Upon the facts, it would be impossible for Fox to deny that
Living was a co-partner or legally to refuse him his rights as
such. Neither could Living be heard to say, as against persons
dealing with the firm, that he was not a partner. When, there-
fore, the note was received by the plaintiffs, it was a note for
good consideration, not overdue.

But then it is said that a failure of consideration accrued by
reason of what took place between Fox and Living in July, 1908,
when Living left the firm’s place of business. What occurred
at that time could have no greater effect than a dissolution of
the partnership. If, as Living seems to think, it was a wrongful
expulsion, that could not alter his right to be restored, or, if the

XXVI.]

ONTARIO LAW REPORTS.

189

conditions appeared to be such as to render impossible a con-
tinuance of the partnership, to a judgment for dissolution, upon
such terms as the circumstances justified. Whether Living con-
sidered that a dissolution was effected by what occurred, or con-
sidered that he was wrongfully expelled, he seems to have ac-
quiesced, and to have taken no steps either to be restored or to
procure a taking of the partnership accounts.

The circumstance that Living paid or was paying a premium
or bonus could make no difference in this case, where there was
no stipulation or agreement as to the time of the duration of the
partnership.

Whether through oversight or inadvertence, there was no
agreement that the partnership should continue for a specified
time or definite period. But the partnership was in fact created;
and, that being so, its subsequent termination would not create
a total failure of consideration so as to affect the validity of the note
in the hands of either Fox or the plaintiffs; although, upon taking
the partnership accounts, Living might be able to shew himself en-
titled to a return of part of the premium. The question is dis-
cussed at length in Jindley on Partnership, 7th ed., p. 625 et seq.
At p. 626 it is said: “In the first place, assuming the partnership
to have been in fact created, it is clear that there has not been
a total failure of consideration for the premium; and, conse-
quently, it cannot be recovered as money paid for a consideration
which has failed. In the next place, persons who enter into
partnership know that it may be determined at any time by
death and other events; and unless they provide against such
contingencies, they may fairly be considered as content to take
the chance of their happening, and the tendency of modern deci-
sions is to act on this principle.’’ It does not necessarily follow
that no part of the premium is to be returned in any case. On
the contrary, it appears from many authorities that in cases
where the dissolution was not brought about by wrongful con-
duct on the part of the partner who paid the premium, or under
circumstances for which he is responsible, a return of part may
be awarded. But as to what part, the learned author says (p.
630): “There is no definite rule for deciding in any particular
case the amount which ought to be returned;” and instances

C. A.
1912

Merchants
Bank of
Canada
v.

Thompson.

Moss, C.J.O.

190

C. A.
1912

Merchants
Bank of
Canada
v.

Thompson.

Moss, C.J.O.

ONTARIO LAW REPORTS. [vol.

are given of the circumstances which are to be taken into con-
sideration.

The defendants’ difficulty in this case is, that they have not
shewn the circumstances attending the dissolution sufficiently to
enable a decision to be given as to whether Living is entitled to
a return of part of the premium. There are charges and counter-
charges of misconduct on the part of Fox and Living; but they
are not before the Court; and it was for the defendants, if they
desired to avail themselves of the defence of partial failure, to
have put the case in proper train for inquiry. Neither is there
material upon which can be ascertained what, if any, proportion
of the premium should be returned — nothing to reduce the amount
of the indebtedness as represented by the note. The burden
of shewing this was on the defendants, and it was not for the
plaintiffs to shew the state of the accounts. Payments, either by
reduction of the amount of the premium or receipt by Fox of
profits of the business, were to be proved by the defendants, and
they failed to shew either.

The appeal should be allowed and the judgment at the trial
restored with costs of the appeal to the Divisional Court and
this Court.

Meredith, J.A.: — The first question involved in this case is
one of fact, namely: What was the nature and effect of the trans-
action between the bank and Fox by which the bank became the
holders of the promissory note in question, of which he was the
payee, by virtue of the indorsement of it by him over to their order,
and the delivery of it at the same time, by him to them.

We are, of course, not bound by the present impressions, of
either of the parties to that transfer, as to its true nature and
effect; memory, at best, is likely to be more or less treacherous,
and none the less because one of the persons was the manager of
a bank, upon whose mind impressions of banking transactions
were being continuously made in large numbers. In such a case
as this, the surrounding circumstances and the probabilities are
very useful witnesses.

Fox was a customer of the bank, and a man whose business
affairs, or other exigencies, made it necessary Ar expedient for
him to borrow money from time to time, and the note in ques-

XXVI.]

ONTARIO LAW REPORTS.

191

tion was, at least, likely to be helpful and to be used in obtaining
the necessary credit in such an institution as this bank — one of
the several foremost in this country.

There are really only three purposes for which it is possible
that the transfer of the note could have taken place: (1) for
safe-keeping; (2) as security for money advanced or to be
advanced; or (3) for collection.

C. A.
1912

Merchants
Bank of
Canada
v.

Thompson,

Meredith, J.A.

Safe-keeping — mere custody — is out of the question: no one
suggests it; it ought not to have been indorsed over if that
were the intention of the parties. ■

Collection alone seems to me to be also out of the question;
no one testifies to it; and no one, having regard to all the circum-
stances of the case, could reasonably conclude that such was the
full nature and effect of the transaction. It was the note of the
man’s partner, transferred while they were carrying on business
together, many months before the rupture between them: it
was not a note of the ordinary mercantile character usually paid
and taken up through the payee’s banker. What reason can be
suggested for placing the promissory note of one’s partner in
a bank for collection: this partner was the principal debtor, and
he was at hand: if it be suggested that the payee knew or ex-
pected that the partner would resist payment, then it is almost
certain that it would be transferred so as to give the bank higher
rights than the payee’s.

The testimony of the bank’s manager is that the note was
taken by the bank, through him, for what it was worth; that
is, of course, for what it was worth in Fox’s dealings with the bank
and his obligations to the bank in connection with them, not for
the small commission to be had for collection if it were paid at
maturity. The testimony of Fox at the trial was that the purpose
of the transaction was that the bank should hold the note as
collateral security for moneys advanced to him from time to
time; and, he added, “from drafts going through;” words which
do not seem to me to have been intended to put any express
limitation upon the extent of the security, but rather to indicate
that which was in the mind of the witness at the moment of making
the statement; and was his way of expressing the character of
the business which he did with the bank and for which they would
need security; strictly speaking, they must have meant more

192

ONTARIO LAW REPORTS.

C. A.
1912

Merchants
Bank of
Canada
v.

Thompson.

Meredith, J.A.

[VOL.

than they literally convey. -No security would be needed for
drafts going through for collection; security would be needed
only for money advanced, whether on “ paper ” strictly called
drafts or not.

It is quite obvious that, if the manager had regard for his
masters’ interests, or for his own reputation as a banker, he would
have taken the note as security for such sum as might from time
to time be advanced by the bank to Fox, especially as there can
be no manner of doubt that Fox was quite willing that the bank
should so acquire and hold it; that is, that it should be held as
security, for the amount of Fox’s indebtedness to the bank from
time to time in his account with them. If we draw the conclu-
sion, from circumstances fully warranting it, that the banker
would take all the security he could get, and would try to get
more, we shall be very much nearer the truth in almost, if not
quite, every case, than if, from the same circumstances, we con-
clude that he would reject security which he might as easily have
had and would reject it without rhyme or reason.

So that we have a customer, hungry for credit on the best
terms obtainable, with a negotiable instrument by which he can
get more credit and better terms if he pledge it as a standing
security; and a banker always hungry of every available security;
and so you might as well expect two hungry men to put aside,
instead of eating, good food set before them to be eaten, as to
expect this note under the circumstances to be laid aside for col-
lection only: I accept Fox’s statement as to the purpose of the
transfer of it without any sort of doubt.

There is really nothing, that militates against this view of this
case, in any of the circumstances relied upon by the respondents:
it was quite right in any case to enter the note in the bankas
collection docket: why not? It was in the bank’s interests,
and no doubt their duty, to send it through the regular process
for collection. It was not discounted: the proper course of the
bank seems to me to have been taken in taking the usual steps
to enable the makers to pay at maturity: and would have been
taken in placing the proceeds of the note to the credit of Fox’s
account, if it had been paid.

If for collection only, it would be odd that, for many weeks
after it became payable, no steps of any kind were taken respect-
ing it: remaining as it did is, of course, that which was entirely

XXVI.]

ONTARIO LAW REPORTS.

193

right if it were a subsisting security. And, beside all this, as
I have before mentioned, if there were any likelihood of the de-
fences which are now being set up, k it would have been better
for Fox that the bank should become and remain throughout
holders for value, unaffected by any equity in respect of it, to
the extent of his indebtedness to it.

The fact that no “ hypothecation paper” was taken with it
has little, if any, weight. It was a single note, and the course
of business of the bank in that respect, at the branch where the
transaction took place, is testified by the manager to have been
as follows, in this respect: —

C. A.
1912

Merchants
Bank of
Canada
v.

Thompson.

Meredith. J.A.

“Q. And you took a hypothecation, I suppose, at the time?

A. No.

“Q. Isn’t that usual when notes are left at a bank, except
when they are left for mere safe-keeping? A. It is more regular.
Sometimes one way and sometimes the other.”

And I cannot think that the testimony of the bank manager
warrants any such conclusion as that Fox might have taken up
this note at any time when he was under any liability to the
bank: he could, of course, have taken it up at any time when
no such obligation existed; but, of course, at the risk of not
getting credit when he next sought it.

If Fox were making, and if in law he could make, an appro-
priation of the proceeds of the note to the payment of the balance
of his account by the bank, on the ground that the bank never
acquired or held the note in this way, would he be likely to suc-
ceed? We must not let sympathy for the man who made the
note, and got others to join with him as makers, and who plainly
has not come very well out of his co-partnership experience with
Fox, affect the strict legal rights of the parties. If it may be
said, to the bank, why did you not take a writing evidencing
the fact, if it were a fact, that you were to hold the note as your
continuing security? might it not, with much greater force, be
said to Fox, why did you not take a receipt for the note shewing
that it was transferred for collection only? and why not take
the note up, or do something in regard to it, after failure of the
makers to pay?

The disinclination of the bank to have the note sued on in
their name does not help the respondents; if they were collectors

194

ONTARIO LAW REPORTS.

C. A.
1912

Merchants
Bank of
Canada
v.

Thompson.

Meredith, J.A.

[VOL.

merely in the sense of a collecting agency, they would be less likely
to have such a disinclination. Such a disinclination is natural
in any case, and the more jso at the instance of another and for
his benefit; but, in this case, the bank have been driven to sue
in their own interests now.

My conclusion upon the first question involved is, that the
note was taken and always held by the bank as security for the
repayment of all that might from time to time be owing by Fox
to the bank: see Atwood v. Crowdie, 1 Stark. 483.

If I am right as to the facts, there can be no doubt that the
note is good, in the bank’s hands, against the makers of it, for
the amount of the indebtedness of Fox to the bank, for which
judgment was entered in favour of the bank at the trial: the
fact that at some times there was nothing due from Fox to the
bank would not cut out that right or deprive the bank of the
position of a holder in due course; there would not be by im-
plication a new transfer of the note as security for each separate
indebtedness or advance; there would be but the one trans-
action, to which all changes in the account between Fox and
the bank would be referable; everything would relate back to
the one transfer, made while the note was current; although, of
course, it was quite competent for Fox to have taken up the note
at any time when there was no obligation on his part to the
bank: see Atwood v. Crowdie, 1 Stark. 483 — a case extremely
like this case in substance.

I would allow the appeal and restore the judgment to the
extent of the amount of the plaintiffs’ claim proved at the trial.

Garrow and Magee, JJ.A., agreed in allowing the appeal.

Maclaren, J.A. (dissenting): — This action was brought by
the bank against two of the three makers of a joint and several
promissory note for $2,000 to the order of one C. H. Fox, who
indorsed it over to the bank before maturity. It was not pro-
tested, and has not been paid. The action was tried by Boyd,
C., who held that, under sec. 54, sub-sec. 2, of the Bills of Ex-
change Act, the bank was entitled to recover against the makers
the sum of $1,116.39, being the amount of their lien for the in-
debtedness of Fox. The defendants having appealed to the
Divisional Court, the judgment was reversed and the action

XXVI.]

ONTARIO LAW REPORTS.

195

dismissed, on the ground that the bank was not a holder in due
course, but acquired its lien after maturity and dishonour and
after a total failure of consideration. Britton, J., dissented.

The note in question was given under the following agree-
ment : —

“I agree to buy one-half interest in the manufacturers’ agency
of Mr. Chas. Fox, in the city of Vancouver; to have one-half
interest in all agencies controlled by him and any agencies which
he shall secure: Mr. Fox to have one-half interest in all agencies
which I shall secure — for the sum of two thousand dollars ($2,000).

“That Mr. Fox and myself to each put into the business the
sum of one thousand dollars ($1,000).

“That I shall work my way to Montreal, returning to Van-
couver as soon as possible.

“Mr. Fox and myself to each draw a stated salary agreeable
to each other.

“Balance of commissions, after salary and general expense
accounts are deducted, to be equally divided.

“Dated at Vancouver, in the Province of British Columbia,
this 19th day of March, 1907. C. H. Fox. Alf. H. Living.”

On the same day, Fox gave Living the following letter: “Van-
couver, Canada, March 19th, 1907. Mr. A. Living. Dear Sir:
Confirming our agreement of to-day, it was understood that I
will at my own expense take a trip to England and Germany
during the next year to secure better agencies, particularly cutlery,
household furnishings, and fire-arms. Yours truly, C. H. Fox.”

Living had not the $2,000 to pay Fox; but, after getting a
note that was not satisfactory and was returned, he finally per-
suaded the two defendants, his uncle Thompson, and his mother-
in-law Mrs. Turley, both of Ottawa, to join him in a joint and
several note dated Vancouver, July 1st, 1907, for $2,000, payable
in three months after date, to the order of Fox.

Early in August, Fox tried to discount this note at the Mer-
chants Bank, Vancouver; but, after inquiry, the manager, Harri-
son, declined to discount it. Fox took it away, but on the 12th
September, 1907, he brought it back and left it with the manager.
There is a question as to the terms on which it was left, which
will be considered presently.

The defendants urged in the Courts below and before us

C. A.
1912

Merchants
Bank of
Canada

Thompson.

Maclaren, J.A.

196

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Merchants
Bank of
Canada
v.

Thompson.

Maclaren, J.A.

that Fox, when he was the legal holder of the note after maturity,
had given time to Living, who was his only debtor, the defen-
dants being merely sureties, and that on this account the defen-
dants were released. It was held by both Courts that this de-
fence was not proved; and I am of opinion that they were clearly
right.

It was also argued before us that, as the defendants were
mere accommodation makers, the bank could not, after maturity
and dishonour, acquire a good title to the note as against the
sureties, and that they were released by not being notified of
the dishonour. Being makers, they were not entitled to notice,
and the mere fact of their being accommodation makers was not
alone sufficient to prevent the bank acquiring a good title after
maturity for value, as this is not an equity attaching to a note.
See Chalmers on Bills of Exchange, 7th ed., p. 130; 1 Daniel
on Negotiable Instruments, sec. 726; Sturtevant v. Ford (1842),
4 M. & G. 101.

When we come to deal with the main question, we find the
situation a very unsatisfactory one, as the business between
Fox and Living was done in the most slipshod and irregular
manner, as were also the dealings between Fox and the bank
with respect to the note in question. Neither Fox nor Living
was made a defendant in the present action; but they were
both witnesses at the trial; and, wherein they differ in their
testimony, the Chancellor does not express any preference .
Harrison, the manager of the bank, who personally made the
arrangements with Fox regarding the note, was not at the trial,
he having been previously examined at Vancouver under a com-
mission; so that, as regards his testimony, we are in the same
position as was the Chancellor. Where his testimony con-,
flicts with that of Fox, I prefer to accept his version of the facts
especially as he is corroborated by the books and by the entries
and records made at the time. As to the terms on which Fox
left the note with him, Harrison simply says, “He left it with
me for what it was worth.”

From the evidence of Harrison it appears that on the 4th
September, 1907, he had discounted for Fox a $500 note, which
was current on the 12th September, when the note now sued
on was left with him at the bank. He also discounted another

XXVI.]

ONTARIO LAW REPORTS.

197

note for $300 for Fox on the 29th September, 1907. From this
time onward until the 25th November, 1908, Fox was from time
to time indebted to the bank in varying amounts; and at times,
sometimes for weeks at a time, he was free from such indebted-
ness. From the 25th November, 1908, until this action was
brought on the 2nd March, 1909, he was indebted continuously.
Harrison’s evidence as to the position of the note during these
periods is given as follows: “Q. And at any time during this
period, when Fox was indebted to the bank, he could have taken
the note out of your possession and done whatever he chose with
it? A. Yes, had he chosen.” As a banker, he knew that this
correctly described the position of the bank with respect to a note
left with it by a customer, as he says this one was, simply “for
what it was worth,” and without any special pledging or hypothe-
cation, and the rights which the bank had under the banker’s
lien, whereby it has the right to retain any such note for
any defyt due to it; but has not the right to retain it for
any liability which has not yet become due or payable. See
Grant on Banking, 2nd ed., p. 306; 1 Halsbury’s Laws of Eng-
land, sec. 1258.

It was urged on behalf of the bank, on the authority of Atwood
v. Crowdie, 1 Stark. 483, that, although there was no lien when
there was nothing due, yet, on the $450 note becoming due on
the 25th November, 1908, the lien of the bank would revive as
of the 12th September, 1907, the date of the original delivery of
the note to the bank.

Such is not the effect of Atwood v. Crowdie. Lord Ellen-
borough’s holding was not what is claimed, but was that the
lien on the accommodation bills having ceased to attach when
the debt was paid “by allowing them to remain in the hands of
the plaintiffs, the lien revested, when upon fresh advances made,
the balance turned in favour of the plaintiffs.” What the case
really decided was that the lien would revive as of the date of
the fresh advances, and that a party might acquire a lien on
accommodation bills after their maturity. This case, so far as
it is in point, is entirely in favour of the defendants, as it would
shew that the bank is in the position of any other holder
taking a bill after maturity — it takes it subject to its equities.
The legal position of the bank in this case is the same as though

C. A.
1912

Merchants
Bank of
Canada
v.

Thompson.

Maclaren, J.A.

198

ONTARIO LAW REPORTS.

C. A.
1912

Merchants
Bank of
Canada

Thompson.

Maclaren, J.A.

[VOL.

it had returned the note to Fox when there was nothing owing
by him, and he had redelivered it to the bank when he again
became indebted to the bank on the 25th November.

The next question is, whether there was such a failure of
consideration as between Fox and Living as would prevent the
bank from recovering, as was held by the Divisional Court. In
order to decide as to this, we have to look at their agreement of
the 19th March, 1907, set out above, and to consider their rela-
tions and the dealings between them, in so far as they may affect
this note up to the 25th November, 1908.

A glance at the agreement will shew how crudely and inarti-
ficially it is drawn; and a perusal of the agreement and the evi-
dence will shew how completely each of the parties appears to
have failed, in almost every particular, to carry out fhe terms
and stipulations binding upon them respectively.

The evidence shews that Fox never made over or gave to
Living the one-half or any other interest in any of the agencies
he then had or secured afterwards, and that Living never gave
him the $2,000 or any part of it; that neither of them paid in
any part of the $1,000 which they were each to contribute as
capital; that Fox kept sole control of the business premises, his
own name alone appearing on the sign; that no partnership
books were ever opened or kept; that the bank account remained
in the name of Fox individually; and that he did not go to Eng-
land or Germany, as he undertook to do, in order to secure better
agencies. The nearest approach to anything like a partnership
appears to have been their getting a few months after the agree-
ment some stationery with the name of “Fox & Living” upon
it. Fox says this was used for some of their correspondence,
which Living denies. Their proposed partnership amounted to
so little that, when they quarrelled and Fox put Living out, all
the latter had to do was to pick up a few private letters off the
desk and walk out. Up to the time of the trial (nearly two
years) neither of them had taken any further steps to settle up
their business. The only question, however, with which we have
to deal at present is that of the consideration or the failure of
consideration for the note. This was the $2,000 which Living
was, under the first paragraph of the agreement, to pay Fox for
a one-half interest in all the agencies then controlled by Fox,

XXVI.]

ONTARIO LAW REPORTS. ,

199

and in any he might thereafter secure, possibly including his
undertaking to go to England and Germany at his own expense,
no part of which was carried out by Fox, so that there was a
total failure of consideration. This being a defect of title within
the meaning of sec. 70 of the Bills of Exchange Act, or equity
attaching to the note, and existing before and at the time that
the lien upon which the bank sued had its origin, which was
long after the maturity of the note, the bank could acquire no
better title than Fox then had; and the note was void for want
of consideration.

If the parties were going into matters beyond this, it could
only be done, as the learned Chancellor suggested, in proceedings
to which Fox and Living were parties.

For these reasons and others given by Falconbridge, C.J.,
I am of opinion that the judgment of the Divisional Court was
right, and should be affirmed.

C. A.
1912

Merchants
Bank of
Canada
v.

Thompson.

Maclaren, J.A.

Appeal allowed; Maclaren, J.A., dissenting.

[IN THE COURT OE APPEAL.]

County of Wentworth v. Township of West Flam-
borough.

C. A.
1912

Highway — Township Boundary Line — “ Deviation ” — Substitution — Municipal April 15

Act, 1903, sec. 622.

Held, affirming the judgment of a Divisional Court, 23 O.L.R. 583, that the
road in question was and is a “deviation” of a town-line road, within the
meaning of sec. 622 of the Municipal Act, 1903.

Township of Fitzroy v. County of Carleton (1905), 9 O.L.R. 686, specially
referred to.

Appeal by the defendants from the judgment of a Divisional
Court, 23 O.L.R. 583.

November 27, 1911. The appeal was heard by Moss, C.J.O.,

Garrow, Maclaren, Meredith, and Magee, JJ.A.

G. Lynch-Staunton, K.C., for the defendants, argued that the
judgment of the learned trial Judge should be restored, on the
ground that the road in question was not a deviation within the
meaning of the Municipal Act. Reference was made to County
of Victoria v. County of Peterborough (1889), Cameron’s Sup. Ct.

Cas. 608, and the same case in (1888), 15 A.R. 617, especially
per Osier, J.A., at p. 627.

200

ONTARIO LAW REPORTS.

C. A.
1912

County of
Wentwoetii
v.

Township
of West
Flam-
borough.

[VOL.

J. L. Counsell, for the plaintiffs, relied upon the judgment of
the Divisional Court and the cases therein referred to. The
merits of the case are with the respondents, as the road is ad-
mittedly useful to the defendants, and the money in respect of
which the claim is made has been properly expended.

Lynch-Staunton, in reply.

April 15, 1912. Garrow, J.A. : — Appeal by the defendants
from the judgment of a Divisional Court reversing the judgment
at the trial of Middleton, J., who dismissed the action.

The defendant applied for leave to appeal, and such leave
was granted, but confined to one point, namely, whether the road
in question was and is a deviation road. See 2 O.W.N. 1223, and
note at p. 592 of the report in 23 O.L.R.

The defendants’ objections to an affirmative answer to this
question seem to be: (1) as to its origin, which it is said was
the Carroll plan; and (2) that the road does not return to the
line of the original boundary line road allowance.

These objections are not unlike those considered by this Court
in Township of Fitzroy v. County of Carleton (1905), 9 O.L.R.
686. There is evidence here, slight it is true, that before the
registration of the Carroll plan the travelling public had used
a road in the nature of a trespass road upon or near the line of
the road afterwards laid out upon that plan, just as in the Fitzroy
case a trespass road had preceded the formal action of the town-
ship councils. And in that case, as in this, the deviation did
not terminate in the boundary line between the two townships
where it originated, but was carried across another township
boundary, and thence through that township into the original
line. The question there arose under sec. 617, sub-secs. (1) and
(2), of the Municipal Act, 3 Edw. VII. ch. 19. Here it arises
under sec. 622, which docs not contain the condition in sec. 617
that the deviation must be only for the purpose of obtaining a
good line of road. But, notwithstanding that difference, the
question what, under the statute, is a deviation road, must,
under both sections, in my opinion, be practically the same. The
statute gives no definition. Its object, no doubt, was, first, to
assist the public in obtaining a practical highway, by enabling
serious obstacles in the true line to be passed around; and, second,

XXVI.]

ONTARIO LAW REPORTS. ,

201

to make the general provisions as to maintenance, whereby the
burden is fairly apportioned, apply. The question is really more
one of fact than of law. There must have been a sufficient excuse
in the nature of the ground to justify an abandonment of the
original line of road. And it must appear that the deviation was
intended to serve and is serving the public need, which would
have been served if it had been reasonably possible to open and
use the original allowance; but its origin and history are of less
consequence than the facts existing when the question arises,
when the main inquiry must be, is the road now a public high-
way, and is it in fact serving the public purposes which a road
upon the original allowance would have served? Its direction
and its nearness to the original line are, of course, not to be dis-
regarded, for a new road at right angles could scarcely be called
a deviation within the meaning of the statute. But, while the
general trend , of the new road should be in the direction of the
old, it is not, I think, imperatively necessary that the former
should actually terminate in the latter. The statute does not
say so, nor, in my opinion, does reason, so long as by means of
some other public road the original line may conveniently be
reached.

The facts here seem to be sufficient to justify the judgment of
the Divisional Court. For over half a century the public, in
passing and repassing along the boundary line road so far as it
was opened, have used the new road, or deviation, to reach points
which would have been reached over the original allowance if
it had been opened. And that that was the intention is also, I
think, established by the circumstance that the county council,
before conveying the original allowance to Carroll, required a
report from an engineer, which was furnished, that the new road
was sufficient for public use. At that time, township boundary
lines were under the jurisdiction of county councils; and, if the
new road was not intended to be in substitution for the old,
and therefore a deviation within the meaning of the statute,
the matter in no way concerned the county council.

I would dismiss the appeal with costs.

Meredith, J.A. : — -The single question raised upon this ap-
peal is, whether, for the purposes of maintenance and improve-

C. A.
1912

County of
Wentworth

Township
of West
Flam-
borough.

Garrow, J.A.

14 — XXVI. O.L.R.

202

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

County of
Wentworth
v.

Township
of West
Flam-
borough.

Meredith, J.A.

ment, that part of the public road in question in this action is
or is not to be declared part of the town-line lying between the
townships of East and West Flamborough; it is not upon the
original allowance for that highway; but, for the plaintiffs, it is
contended that it is a deviation from it such as is mentioned in
the various municipal enactments and in respect of which the
duty of maintenance and improvement attaches in the same
manner as if it were actually upon such an allowance for such
a road.

In considering such a question, regard must be had to the
purposes of the legislation involved; and such purposes seem to
me to contain the controlling influence in the consideration of
this case.

The purpose of the legislation was to provide convenient
roads for those to whom the Crown granted lands adjacent to
them, as well as for all others who might lawfully use them;
and, in such a case as this, the statute-imposed obligation to
open, maintain, and improve town-lines, including all such devia-
tions, is, in very plain words, put upon the adjoining townships.

So that it was the duty of the defendants, jointly with the
Township of East Flamborough, to open, maintain, and im-
prove the town-line in question; but, by reason of natural ob-
structions and difficulty in the way of such a work, that has
hitherto been quite impracticable; and the law is not unreason-
able; it gives power, upon certain conditions, to open a new road,
in lieu of that laid down in making the original allowance for
roads, and to close it; and it also provides for deviations; the
result of all this seems to me to leave the defendants in this pre-
dicament: if that part of the road in question has not, for the
purpose of maintenance and repair, become part of the town-line,
the defendants are, jointly with the other township, under the
statute-imposed obligation to open, maintain, and improve it —
an alternative which they would no doubt gladly flee from, even
though in so doing they ran into that which has been imposed
upon them in this action.

I can perceive no good reason why that part of the road in
question may not properly be deemed part of the town-line for
the purposes of maintenance and improvement: it is co-extensive
only with that part of the original allowance which is impassable;

XXVI.]

ONTARIO LAW REPORTS.

203

if the town-line had to be opened, it was necessary that there
should be either as extensive a deviation, or the expenditure of
money vastly exceeding the amount required in making such a
deviation; and, whether that is essential or not, this deviation
leads back again to the original allowance, although its main
purpose — a way into the city of Hamilton — is fulfilled before going
as far as that. So, too, the main purpose of the original allow-
ance for road, if opened, would be to give a way into that city.

The piece of road in question answers all the purposes of a
deviation; and I am unable to perceive anything that materially
stands in the way of that view of the case; unless it be that it
is now not a deviation, but actually part of the line by reason of
the closing of it, where naturally impassable, and the adoption
of this piece in lieu of it; an alternative which would not be
helpful to the defendants.

The trial Judge seems to me to have taken quite too narrow
a view of that which a deviation may be.

I would dismiss the appeal.

Moss, C.J.O., Maclaken and Magee, JJ.A., agreed that the
appeal should be dismissed.

C.A.

1912

County of
Wentworth

Township
of West
Flam-
borough.

Meredith, J.A.

Appeal dismissed with costs.

204

ONTARIO LAW REPORTS.

'[VOL.

[IN THE COURT OF APPEAL.]

C. A.
1912

April 15

Clark v. Loftus.

Life Insurance — Benefit Certificate — Change of Beneficiaries — Person Bene-
fiting by Change — Validity — Onus — Agreement N not to Change —
Failure of Proof — Mental Capacity of Assured — Fraud — Undue Influ-
ence — Fiduciary Relationship.

The assured had apportioned the insurance moneys to arise from an
endowment certificate upon his life, among his wife and two daughters;
hut, while living at the house of one of his daughters, shortly before
his death, and when he was in a feeble state, he purported, by the
execution of a written instrument, to change the apportionment so as
to make that daughter (the defendant) the sole beneficiary: —

Held (Garrow, J.A., dissenting), that no agreement between the assured
and his wife to the effect that the assured would make no change in
the beneficiaries, was proved; that the onus was upon the plaintiffs
to shew that the instrument changing the apportionment was invalid
and ineffectual, and they had not discharged^ that onus ; and that the
defendant was entitled to the insurance moneys, subject to repayment
to the widow of the assured of the sums paid by her to keep the certi-
ficate alive ( as agreed to by the defendant ) .

Judgment of a Divisional Court, 24 O.L.R. 174, reversed.

Per Moss, C.J.O. : — The assured had the right by law to change the nom-
ination of beneficiaries within the scope of the certificate; and, in order
to avoid his act, it was incumbent upon those impeaching its effect
to shew mental incapacity or fraud or undue influence, or such a fidu-
ciary relationship as would shift the onus ; and the plaintiffs had
shewn none of these things. The affirmative is not proved, because
the witness for the negative is not wholly and entirely to be believed
( Nobel’s Explosives Co. v. Jones (1881), 17 Ch.D. 721, 739). The evi-
dence failed to establish a want of capacity in the assured to under-
stand the nature of the transaction or to appreciate its effect.

Per Meredith, J. A. : —“Righteousness,” as applied to proof in such cases
as Fulton v. Andrew (1875), L.R. 7 H.L. 448, means no more than that
the document propounded is really the will of the testator: to import
into the word any such meaning as that it must be proved that the
will is a fair or just one, or such as a reasonable man ought to make,
is entirely wrong. The onus shifts; presumption of knowledge and
approval of the contents of the will, from proof of its due execution by
a competent testator, to whom the will was read over, or who has
read it, is displaced: actual knowledge and approval must be proved by
those who take a benefit under it and who have been instrumental in
making it; the conscience of the Court must be satisfied, that is all.
The circumstances were not such as to make it necessary that the de-
ceased should have the advice of an independent solicitor when effect-
ing the change of beneficiaries. The agreement relied on was not proved.
The wife could not be a “beneficiary for value,” not being expressly
so designated in the certificate. And the Courts below had not found,
and there could not, on the evidence, be a finding of, either want of
mental capacity or undue influence.

Per Garrow, J.A. : — The substantial issue between the parties arose upon
the plaintiffs’ allegation of fraud and undue influence on the part of
the defendant in procuring the assured to execute the instrument
effecting the change of beneficiaries; and that issue, which alone was
sufficient to dispose of the whole case, should be found in favour of
the plaintiffs.

XXVI.]

ONTARIO LAW REPORTS.

205

Appealed y the defendant from the judgment of a Divisional
Court, 24 O.L.R. 174.

January 15. The appeal was heard by Moss, C.J.O., Garrow,
Maclaren, Meredith, and Magee, JJ.A.

G. H. Watson, K.C., and J. T. Loftus, for the defendant.
As to the alleged agreement between the husband and wife
that the apportionment should not be changed, it is submitted that
no binding agreement has been proved; and, in any event, it could
not be given effect to, having in view the amendment of sec. 151
(3) of the Insurance Act, R.S.O. 1897, ch. 203, by 1 Edw. VII.
ch. 21, sec. 2 (5), which provision must be considered to be retro-
active. This states that no one can be a beneficiary for value
unless expressly so designated in the certificate. To revive the
references to the sections of the Act, reference is made to R.S.O.
1897, ch. 203, sec. 80, amended by 3 Edw. VII. ch. 15, sec. 3 (2);
R.S.O. 1897, ch. 203, sec. 151 (3), (4), (5); sec. 159, sec. 160 (1),
(2). Sub-section 3 of sec. 151 of R.S.O. 1897, ch. 203, is amended,
as has been stated, by 1 Edw. VII. ch. 21, sec. 2 (5). Then
sub-sec. 6 of^sec. 2 of the last-mentioned Act amended sub-sec. 2
of sec. 160 of R.S.O. 1897, ch. 203. Thus these two sub-sections
introduce into secs. 151 and 160 of the Insurance Act the same
words. Then 3 Edw. VII. ch. 15, sec. 3 (2), amends sec. 80 of
the Insurance Act, giving the beneficiary the right to sue in his
own name. So that the defendant has an absolute statutory
right to sue to recover these moneys. The plaintiffs failed to
prove want of mental capacity on the part of the deceased to
make the change of beneficiaries in question, or that there was any
fraud or undue influence exercised by the defendant, or that the
defendant stood in a fiduciary position towards her father. Nor
has there been any finding on any of these points. There was at
most only vague suspicion of fraud or undue influence. The
learned trial Judge erred in treating the document of transfer
as a will, and applying to it certain rules applicable in some cases
to testamentary dispositions. The document was not a testa-
mentary disposition, and the rule invoked had no application to it.
The learned trial Judge erroneously held that there was an onus
cast upon the appellant herein: Low v. Guthrie, [1909] A.C. 278,
which modifies Tyrrell v. Painton, [1894] P. 151. The case of

C. A.
1912

Clabk

Loftus.

206

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Clark

Loftus.

Book v. Book (1900-01), 32 O.R. 206, 1 O.L.R. 86, rather went
off on the ground that the beneficiary did not take as wife but as
secured creditor. Besides, sec. 151 (3) was not in force at that
time. The onus was upon the plaintiffs to prove their case,
and in this they have failed. The affirmative is not proved merely
because the witness for the negative is not wholly believed: Nobel’s
Explosives Co. v. Jones (1881), 17 Ch.D. 721, at p. 739. There
was no duty cast upon the defendant to advise her father as to
the nature and effect of his action in altering the apportionment.
The Court has nothing to do with the fairness or unfairness of the
transaction, though that consideration seems to have influenced
one of the learned Judges below in his placing this case within
the principle of Fulton v. Andrew (1875), L.R. 7 H.L. 348. The
change which was made was Clark’s act and deed, and that is all
which it is necessary to shew.

J. B. Clarke , K.C., and E. J. Hearn , K.C., for the plaintiffs.
At the time he signed the instrument of transfer, Clark lacked
the mental capacity to comprehend the nature of the instrument
or the effect of what he was doing, and the defendant, taking
advantage of his mental condition, and by the exercise of fraud
and undue influence, induced him to sign the transfer. Even if
competent, he was precluded from altering the original nomina-
tion of beneficiaries, by reason of the agreement between himself
and the plaintiff Jane Clark that he would not make any change
in the beneficiaries. This agreement was made before the passing
of the amendment to the Insurance Act (1 Edw. VII. ch. 21, sec.
2 (5).) This amendment is not retrospective, and does not apply
to this case. In any event, the agreement is not within the pro-
visions of the Act. In the circumstances of this case, the onus
was upon the defendant to shew that the deceased thoroughly
understood what he was doing, or at least that he had been pro-
tected by independent advice: Phillips v. Mailings (1871), L.R.
7 Ch. 244; McCaffrey v. McCaffrey (1891), 18 A.R. 599. In view
of the facts found by the learned trial Judge, the document relied
upon as making a change of beneficiaries ought not to stand : Fulton
v. Andrew, L.R. 7 H.L. 448, at p. 471; Tyrrell v. Painton, [1894]
P. 151; Adams v. McBeath (1897), 27 S.C.R. 13; Collins v. Kilroy
(1901), 1 O.L.R. 503; Low v. Guthrie, [1909] A.C. 278; Malcolm
v. Ferguson (1909), 14 O.W.R. 737, 1 O.W.N. 77; Kreh v. Moses

XXVI.]

ONTARIO LAW REPORTS.

207

(1892), 22 O.R. 307; In re Jansen (1906), 12 O.L.R. 63; Milroy
v. Lord (1862), 4 DeG. F. & J. 264. From the time of making
the agreement, Clark was a trustee of the policy for the beneficiaries
named therein, and the appellant, having knowledge of the agree-
ment and taking the benefit of it, is bound by its terms, and is not
entitled to take any further benefit arising from a breach of the
trust which she actively assisted in bringing about, and prepared
and witnessed herself: Allen v. Wentzell (1909), 7 E.L.R. 575.
The certificate, or policy, was subject to the rules of the Order
in respect to the change of beneficiaries. See rule 150. We also
rely on the reasons given in the judgments below.

Watson, in reply. There is the right to transfer without
reference to the rules and conditions. See rule 147 ; also Mingeaud
v. Packer (1891), 21 O.R. 267, affirmed in (1892), 19 A.R. 290;
Neilson v. Trusts Corporation of Ontario (1894), 24 O.R. 517;
Re Harrison (1899), 31 O.R. 314. The other side rests its case
on suggestions, suspicions, and equities. There was no fiduciary
relationship, and so the doctrine as to necessity of independent
advice has no application: Wallis v. Andrews (1869), 16 Gr. 624,
at p. 641; McEwan v. Milne (1884), 5 O.R. 100; Trusts and
Guarantee Co. v. Hart (1901), 2 O.L.R. 251, affirmed in (1902),
32 S.C.R. 553; Fisher v. Fisher (1902), 1 O.W.R. 442; Vandusen
v. Young (1902), 1 O.W.R. 55; Christian v. Poulin (1902), 1
O.W.R. 275; Thorndyke v. Thorndyke (1902), 1 O.W.R. 11.
The effect of the statute since its amendment has been considered
in several cases. See Re Murray (1904), 4 O.W.R. 281; Lints v.
Lints (1903), 6 O.L.R. 100; Cartwright v. Cartwright (1906), 12
O.L.R. 272; In re Cochrane (1908), 16 O.L.R. 328.

April 15. Moss, C.J.O.: — One James E. Clark, a member
of the Independent Order of Foresters, and the holder of an en-
dowment certificate issued by the Order, and dated the 6th March,
1893, for the sum of $3,000, payable as in the certificate set forth,
died on the 16th February, 1910. Thereupon a dispute arose
between the parties hereto as to the right to receive payment from
the Order of the $3,000 in question. The amount, less expenses,
was paid into Court by the Order. Pursuant to an order of Court,
these proceedings were instituted for the determination of the
question as to which of the parties was entitled to the moneys,

C. A.
1912

Clark

Loftus.

208

C. A.
1912

Clark

Loftus.

Moss, C.J.O.

ONTARIO LAW REPORTS. [vol.

and, if more than one was entitled, the proportions in which they
were to share.

In the certificate all three were named as beneficiaries; but,
by an instrument signed by him and dated the 29th November,
1909, Clark designated the defendant Florence Loftus as the sole
beneficiary, reserving to himself the right of revocation and sub-
stitution of other beneficiaries in accordance with the constitution
and laws of the Order. This instrument remained unrevoked
at the date of his death.

The question for trial, therefore, was as to the validity of this
instrument. It was not admitted by the plaintiffs, but at the
trial it was clearly proved, that the signature attached to the in-
strument was Clark’s; and it is not open to question that, as -
executed by him, it is in form and substance sufficient to effect
the desired change of beneficiaries.

But the plaintiffs alleged that, at the time he signed the in-
strument, Clark was in such a mental condition as to be unable to
comprehend the nature of the instrument or the effect of what
he was doing, and that the defendant, taking advantage of his
mental condition, and by the exercise of fraud and undue influence,
induced him to sign the instrument. They further alleged that,
even if competent, he was precluded from altering the original
nomination of beneficiaries, by reason of an agreement between
him and the plaintiff Jane Clark that he would not make any
change in the beneficiaries.

The learned trial Judge held the instrument of the 29th No-
vember, 1909, to be invalid and ineffective, but chiefly on his
view as to Clark’s mental condition when he signed it and as to
the duty which he considered was cast upon the defendant of
satisfying the Court that Clark properly understood and appre-
ciated the effect of his act. He also expressed the opinion that an
agreement was in fact made between Clark and the plaintiff Jane
Clark; but, in view of the amendments made to secs. 151 and 160
of the Ontario Insurance Act, he rested his judgment principally
upon the other branches of the case. In the Divisional Court
the judgment was affirmed upon the latter grounds. Mr. Justice
Clute, by whom the principal judgment was delivered, held that,
in view of the amendments, effect could not be given to the agree-
ment. The Chief Justice of the Common Pleas reserved his

XXVI.]

ONTARIO LAW REPORTS.

209

opinion as to the effect of the amendments. Mr. Justice Teetzel
agreed in the result. So far, therefore, as expressed opinions are
concerned, it may be taken that, while it has been found that there
was an agreement in fact, it could not avail to preclude Clark
from making the change of beneficiaries. As I have reached the
conclusion that an agreement in fact has not been proved, it is
pot necessary to consider the effect of the statute as amended.
As to what is said to have taken place between Clark and the
plaintiff Jane Clark on this point, there is no conflict of testimony
— the proof resting upon what was deposed to by the two plaintiffs,
taken in the light of subsequent conduct and events. Upon the
testimony, I am, with deference, of the opinion that no agreement
is shewn. I think that, at the time in the year 1900 when it said
the agreement was come to, there was no bargaining and no
intention to bargain about the matter. It happened that Clark,
through losses in his business and inability owing to poor health
to earn any considerable income, concluded that he was unable
to keep up the payments called for by the certificate.

The matter appears to have come up in conversation between
him and the plaintiff Jane Clark, who had separate means. In
her testimony in chief she thus stated what took place: “Q. When
he failed in business did he say anything to you about this insur-
ance? A. Yes, he came and told me that it was to my benefit
and to the benefit of the children to keep that policy up. Q.
What else did he say? A. He said that we were — as we were
beneficiaries for value — Q. He said that you were to pay the
usual assessments? A. Yes. Q. And if you did not, what
would happen? A. He said it would be a loss to me and to the
children. Q. How would it be a loss to you and the children?
A. Simply because I was paying on it, and of course he said he
had no means to pay it. . . . Q. Then he said it was for the

benefit of you and the children? A. Yes. Q. What children?
A. We never made any difference between Florrie and my own.
We were all very agreeable. Q. You were to pay the usual
assessments for the benefit of yourself and the children? A. Yes.
Q. Did you pay the dues and assessments after that? A. I did.”
On cross-examination she was asked: “Q. What happened in
relation to the insurance? A. Well, he had no money to pay on
it, and I paid it. Q. That was all? A. Yes; I paid it. Q. Was

C. A.
1912

Clark

Loftus.

Moss, O.J.O.

210

ONTARIO LAW REPORTS.

C. A.
1912

Clark

Loftus.

Moss, C.J.O.

[VOL.

there anything said? A . Yes; he told me it was a benefit for me
and my children to keep that policy paid, and I did so out of my
own means. . . . Q. But he did not make an agreement with

you or anything of that kind? A. Yes; he told me that me and
my daughters were beneficiaries, and that it was to my benefit
to keep the policy paid-up and for the benefit of the children.
His Lordship: Q. Your children included? A. Yes. Mr. Loftus
(counsel for the defendant) : Q. Why didn’t you state that before?

A. This is the first time I have had anything to do with any-
thing like this. That’s right, and Mrs. Loftus knows it . . .

Q. That is all that was said? A. That is all; he said it was to
our benefit.”

The testimony of the other plaintiff, though varying slightly
in terms, does not carry the matter further. It is true that
to the question “Was there anything said about it?” she
answered: “Yes; my father told my mother in my presence
that he had no means since he failed, and that it was to her benefit,
my sister’s and my own, to pay that insurance; and, as he had
no money to do it, that she should do so out of her own money,
and that she should be benefited by it hereafter, and that it would
he hers.” But, in her answer to the next question, she shews
that it was not her understanding that it was to be her mother’s
any more than any of the others. Asked, “Were you to get any
benefit of it?” she answered, “Yes; the understanding was that
we were to share and share alike.” Now, making all proper
allowance for the suggested inexperience as a witness of the
plaintiff Jane Clark, which may be considered as very fairly
offset by the assistance rendered by her counsel in the form of
leading questions, I am unable to find in this testimony the in-
gredients of an agreement such as has been found. Clark stated
what was very probably true, that he was unable to pay, and said
what was obviously true, that it would be to the benefit of the
beneficiaries to keep the certificate on foot. He put it before his
wife as a matter for her consideration, but he made no request
that she should pay or any stipulation as to what he would do or
would not do if she continued the payments. That matter was
never considered or discussed by them. She was left free to act
on his suggestion or advice or not at her pleasure. Whether as
a matter of fact some of his means were not employed in making

XXVI.]

ONTARIO LAW REPORTS.

211

some of the subsequent payments is by no means clear. It is
shewn that he turned over his earnings to his wife, and there was
a common fund. As shewing that she knew that she was not
bound to continue the payments herself, she admits that she made
application to the defendant to contribute. Payments were
continued to be made by or through her up to the 30th September,
1908, when she ceased making them — and, but for the subsequent
payments being continued by the defendant, the certificate would,
in all probability, have lapsed. So far as the plaintiffs were con-
cerned, they had abandoned all intention or desire to keep it on
foot any longer.

The element of agreement should, I think, be entirely elimin-
ated from the case.

C. A.
1912

Clark

Loftus.

Moss, C.J.O-

Upon the other branches I am also unable to agree to the con-
clusions reached by the trial Judge and the Divisional Court.
These conclusions appear to me to be based upon a misappre-
hension as to the duties and obligations of the defendant under
the circumstances disclosed by the testimony and as to the onus
of proof at the trial. No doubt, the burden may shift from time
to time during the progress of the trial, and it may be assumed that
in the course of this trial the onus varied from time to time as in
other cases. The question is, upon whom was it resting, having
regard to the testimony given, at the time when the evidence
closed?

It having — as before mentioned — been shewn beyond question
that the instrument impeached was signed by Clark, it is scarcely
necessary to say that the onus of shewing that it was for some rea-
son or reasons invalid and ineffectual was cast upon the plaintiffs.

Clark had the right by law to change the nomination of bene-
ficiaries within the scope of the certificate, and in order to avoid
his act it was incumbent upon those impeaching its effect to shew
mental incapacity unfitting him to execute the instrument with
knowledge and appreciation of its effect, or that he was induced to
execute it through fraud or undue influence, or that the defendant,
in whose favour the nomination was made, stood in a fiduciary
relationship towards her father, that is, that she occupied such a
position of trust and confidence in regard to him as necessarily
to lead to the conclusion that she possessed a controlling influence
over his mind and actions. If the latter case were established.

212

ONTARIO LAW REPORTS.

C. A.
1912

Clark

Loftus.

Moss, C.J.O.

[VOL.

then the onus might be cast upon her to support the transaction,
and the question whether she had satisfactorily shewn all that
was required would arise, but only in that case.

It was not alleged nor was it proved or found that the de-
fendant stood in a fiduciary position towards her father. She was
his daughter, but she was neither his trustee, guardian, or agent.
There is no evidence that at any time during his life had he re-
posed any special trust or confidence in her. There existed be-
tween them nothing but the natural affection of father and
daughter; no relationship that called upon the daughter to justify
or explain her father’s action. Assuming capacity and the absence
of fraud or undue influence, the act was one within his right,
however unreasonable or unjust towards others it may appear.
Apart from agreement, with which I have already dealt, Clark
was in no manner a trustee of the certificate or for any of the
parties named as beneficiaries; and his act is binding and con-
clusive, unless the plaintiffs have proved a case of mental in-
capacity or fraud or undue influence.

I have given careful attention to the evidence, as well as to
the' adverse comments of the learned trial Judge upon the tes-
timony of some of the witnesses; and, after making every allow-
ance for the advantage which is necessarily enjoyed by the trial
Judge from having seen the witnesses and noticed their demeanour,
I am unable to adopt the conclusions arrived at. It may be that,
if I shared the views of the Courts below as to the burden of proof,
I should not disagree with their findings. But if, as appears to
me, it lay upon the plaintiffs to prove their case, then, I think,
they failed to discharge the onus.

It has been said more than once that it is a fallacy to suppose
that the affirmative is proved because the witness for the negative
is not wholly and entirely to be believed. The affirmative must
be proved; and to say that a witness for the negative is not
wholly to be believed is, in no sense of the word, to prove the
affirmative: Nobel’s Explosives Co. v. Jones, 17 Ch.D. 721, at p.
739.

The learned trial Judge was disposed to deal with the question
of capacity as upon the same footing as if the act was a testamen-
tary act. As the instrument was intended to take effect in Clark’s
lifetime, it was probably more in the nature of, though not in all

XXVI.]

ONTARIO LAW REPORTS.

213

respects similar to, a gift inter vivos. It differed from the latter
in that it was not absolute in effect, because of the reservation
of a power of revocation.

But, however regarded, the evidence fails, in my judgment,
to establish a want of capacity to understand the nature of the
transaction or to appreciate its effect. Clark was, no doubt, in
poor health and had been so from the time when he suffered from
an attack of paralysis in January, 1909. According to the tes-
timony of the plaintiff Jane Clark, he was then in the hospital
for about three weeks, after which he returned home. In April
he was sufficiently recovered to go to visit an old friend, the
witness Crompton, at his farm near St. Catharines, where he re-
mained until some time in June, a period of about eight weeks.
He appears to have been considered as' of sufficiently good health
and capacity to take care of himself to be allowed by the plaintiffs
to make the journey each way unattended. The evidence fails
to shew any material failure in health or mind between his return
in June and the signing of the instrument on the 29th November.
He appears to have suffered pains in his head produced by a blow
from a trap-door in his factory falling upon him, and which in-
duced the first paralytic condition. But he went about the
streets conversing with his neighbours and calling upon his daugh-
ter the defendant, without it occurring to any one that he should
be attended. The trivial incidents related by the plaintiffs as
indicating mental weakness are wholly insufficient to establish
want of capacity, or inability to understand what he was doing
when he signed the instrument. It was a single and simple trans-
action in connection with a certificate with the purport and effect
of which he was quite familiar, for he had considered and discussed
it on more than one occasion. His signature appended to the
instrument compares quite favourably with that appended to the
agreement concerning the additional rates made with the Order
in September, 1908, and presents every appearance of having
been written by one quite capable of controlling his faculties.
And it is to be noted that the learned trial Judge says that he is
not satisfied that Clark had not testamentary capacity.

Beyond vague suspicion, there is really no evidence of fraud
or undue influence such as is required to be shewn in order to
invalidate such an act as that here impeached. It is important

C. A.
1912

Clark

Loftus.

Moss, C.J.O.

214

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Clark

Loftus.

Moss, O..T.O.

to bear in mind that there was no secrecy about the matter; no
retaining the instrument so as to prevent scrutiny and inquiry.
It was sent on to the Order immediately, and the plaintiffs were
afforded opportunities not only of seeing the instrument, but
Clark was shewn to have visited the plaintiffs from time to time
afterwards, and they had every opportunity of ascertaining whether
or not any improper suggestions had been made to him or his
mind otherwise unduly influenced. But, beyond endeavouring
to induce the Order to refrain from recognising the instrument,
nothing was done or attempted.

The defendant had paid the arrears due in respect of the cer-
tificate after the plaintiffs had abandoned making payments,
and she kept it on foot from that time onwards. Otherwise it
would have lapsed and have been of no benefit to anybody.
Having done so, there was no reason why her father should not,
if he chose, put her in the position of sole beneficiary. In doing
so he was not bestowing upon her an extravagant sum, and he
may very justly have considered that, his wife having considerable
property of her own and having shewn no disposition to keep the
certificate on foot, his daughter by his first marriage, through
whose payments it had been kept on foot, might without unfairness
receive the full benefit of it.

I would allow the appeal and declare the defendant entitled
to the moneys in Court, subject, however, to repayment to the
plaintiff Jane Clark of the sums paid by her in respect of dues and
assessments as offered and agreed to by the defendant’s counsel.

As to the costs, the defendant is entitled to her general costs
of the interpleader proceedings, of the issue, and of the appeal to
the Divisional Court and to this Court.

Meredith, J.A. : — 'The dominating factor in the conclusions
reached in this case hitherto was that which was considered great
unfairness in the result of the transaction which is in question
in this action; had that result been the opposite of that which it
was, that is, had it changed the beneficiaries from the one only
to the three, no one can doubt that it would have been unhesitat-
ingly and firmly upheld. It was its want of “ righteousness”
that caused its downfall.

Mr. Justice Clute seems to me to have put that very plainly,
for himself and as to the trial Judge. After quoting the oft-

XXVI.]

ONTARIO LAW REPORTS.

215

quoted words expressed by Lord Hatherley in the case of Fulton
v. Andrew , L.R. 7 H.L. 448, at p. 472: “But there is a further
onus upon those who take for their own benefit, after being in-
strumental in preparing or obtaining a will. They have thrown
upon them the onus of shewing the righteousness of the trans-
action;” he goes on to say: “The rule appears to me to be applic-
able to a case of this kind, which closely resembles the case of a
will. So far from the evidence removing the suspicious nature of
the transaction and shewing the same to be a righteous transaction,
quite the reverse is the case. The learned trial Judge largely
discredited the evidence of the defence, and considered the trans-
action a most unrighteous one.”

So that two things seem to me to be evident: (1) that there
has been a grave misunderstanding of the meaning which Lord
Hatherley intended to convey by the word “righteousness;”
and (2) that this case is not at all like that with which he was
dealing, or such cases as Barry v. Butlin (1838), 2 Moo. P.C. 480,
or Tyrrell v. Painton, [1894] P. 151.

C. A.
1912

Claek

Lofttjs.

Meredith, J.A.

“Righteousness,” as applied to proof in such cases, means
no more than that the document propounded is really the will of
the testator; that it is the duty of those asking the Court to
pronounce in favour of the will, to prove affirmatively that the
testator knew and approved of its contents: to import into the
word any such meaning as that it must be proved that the will
is a fair or just one, or such as a reasonable man ought to make,
is, of course, entirely wrong: a testator may be as unreasonable,
unjust, or capricious as he pleases, without the Court having
any power to control him; the character of the will may, of course,
afford evidence upon the question whether the paper propounded
is really the testator’s will; but some care must be taken fairly
to treat such things only as evidence; that we do not make them
an excuse for finding against the validity of the will really because
we do not approve of its contents. The man or woman who makes
a will is, it may be, the only one who knows what is just and fair;
and, in the absence of such knowledge as he or she could impart,
one should be very careful of condemning his dispositions of his
property.

On the other point it is not necessary to do more than point
out that this is not the case of a controversy arising for the first

216

ONTARIO LAW REPORTS.

C. A.
1912

Clark

Loftls.

Meredith, J.A.

[VOL.

time after a testator’s death in propounding a writing as his last
will and testament; the controversy arose in his lifetime, and was
carried on for some time before his death and before his second
stroke of paralysis, and carried on by him, on the one side, seeking
registration of his change of beneficiaries, and the respondents,
on the other side, opposing it, in the offices of the friendly society
whose certificate of insurance is the subject-matter of this litiga-
tion. If there had been any real doubt of the man’s knowledge
and approval of the change he had made, or of his capacity to
make it, or that he had duly signed the writing, all that could at
once have been set at rest, by asking him; but that was not done,
nor was any attempt, on the part of the respondents, made to in-
vestigate it; they knew that it had been done, and that they
could not undo it.

The learned trial Judge said, among other things in which
I am quite unable to agree with him, that “the law calls upon the
person who so takes to explain the circumstances in such a way as
to remove all shadow of suspicion from the mind of the Judge who
is called to pass upon the case.” The rule is simply this: the
onus shifts; presumption of knowledge and approval of the con-
tents of the will, from proof of its due execution by a competent
testator, to whom the will was read over, or who has read it,
is displaced: actual knowledge and approval must be proved by
those who take a benefit under it and who have been instrumental
in making it : the conscience of the Court must be satisfied, that
is all.

Again, I am quite unable to agree with him in these obser-
vations also contained in the reasons for his judgment: “The
situation was one which, more than any other situation one can
think of, called for the exercise of great precaution. I think
it called for Mr. Clark receiving advice from an absolutely dis-
interested and independent solicitor.” It was but a single trans-
action, of a very ordinary and simple character; the man had
become dissatisfied with his home, and desired to change it, to
go and live with the only child of his first wife. He may, or may .
not, have had real cause for that desire; that in itself is not
material; he had, as I have said, a right to be capricious; he had
a right to do just as he pleased with his own. His conduct was
not unique, it was not even extremely uncommon; as one grows

XXVI. j

ONTARIO LAW REPORTS.

217

old, the impressions of earlier days are more vivid and attractive
than those of later days, and one is apt to become exacting and
more readily dissatisfied; and there is at least this to be said in
extenuation of this conduct of the man who is not here to justify
himself, that no great efforts, if indeed any efforts, were made to
dissuade him from going away or to induce him to remain or
return. He had got to that age and condition of health that he
was, no doubt, more or less a burden to those with whom he lived,
and there can be little, if any, doubt that, rightly or wrongly;
he was impressed with the idea that his wife thought so. I am
quite unable to perceive anything so complicated or extraordinary
in the circumstances as to require the services of any solicitor, or
what there was in the simple and single transaction that any lay-
man could not quite comprehend. The man knew that his wife
and two children were to share equally in the money payable under
the certificate upon his death — if not changed; he knew that he
wanted to change that so that one daughter should have all;
and that all that was needed to effect the change, could be readily
accomplished through the officers of his “lodge.” He knew also
that his wife had property of her own, of considerably greater
value than this certificate; and that he had no other property
which could go to the child of his first wife.

C. A.
1912

Clark

Loftus.

Meredith, J.A.

The learned Judge was also emphatic in the opinion that
Clark ought to have been advised that he was receding from a
binding bargain, made with his wife, that the beneficiaries of the
certificate should not be changed. In that I am also quite unable
to agree, because: (1) no such agreement is proved; and (2), if
there had been, there would be no object in advising him not to
do a thing he had no power to do. If there were no binding
agreement, it was no part of a solicitor’s duty to advise him on
the moral aspect of his conduct; a solicitor has enough to do in
keeping his client right in law.

That there was no such agreement in fact seems to me to
be plain enough. Notwithstanding the controversy which arose
fully and sharply in the man’s lifetime, there was no assertion
of any such contract. In the first statutory declaration of the
wife, in her opposition to the change being made in the society’s
records, she made no sort of assertion of any such agreement.

15 XXVI. O.L.R.

218

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Clabk

Loftus.

Meredith, J.A.

In a supplementary declaration, made eight days afterwards, for
the sole purpose of making such a claim, she put it in these words : —

“1. That when I began to pay the assessments on the benefit
certificate on the life of my husband, James Clark, about eight
years ago, as set forth in my said former declaration, it was at the
request of the said James Clark that I did so, he intimating to
me that, as my daughter, May Clark, and myself were two of the
beneficiaries named in the said policy, and as he had failed in
business, his membership in the Order and the benefit certificate
would have to lapse, unless I kept the assessments paid, and many
times after that, through the period of about seven years that I
kept the assessments paid out of my own money, he frequently
spoke to me, encouraging me to keep the assessments paid, and I
did so with his knowledge and on the understanding that myself
and my daughter May were to be beneficiaries for value in the said
benefit certificate.

“2. I am sure that my husband did not expect, during that
period, that he would be able to change the beneficiaries in the
said policy from myself and our daughter, May Clark, without
my consent and her consent, and I would not have paid the said
assessments or any of them, but for the fact that she and I were
two of the beneficiaries named in the said benefit certificate.
And I now claim, as the fact is, that she and I are beneficiaries
for value, and I positively object to any change being made in the
beneficiaries as they stand in the said benefit certificate.”

Not only is no such contract proved, but, if the case had been
tried by a jury, there would have been no reasonable evidence to
submit to them in support of any claim that there was.

The man, having been, obliged to give up his business, and
his earning powers being greatly impaired, was unable to keep up
the periodical payments necessary to keep the certificate in force;
there were then, practically, but two things which might be done,
either abandon it, or else make the payments through the family
purse, to which his wife, through the property which she owned,
appears to have been the chief contributor from that time on. To
abandon would have been foolish; to keep up the payments in
that way was really the only thing to be done; and they all acted
accordingly, until the man left the household and went to live

XXVI.]

ONTARIO LAW REPORTS.

219

with his oldest child, when payment out of the household purse
ceased, and payment was taken up by that child.

0. A.
1912

There is really no sort of evidence of any kind of a binding
agreement; if there had been, the wife broke it when she ceased

Clabk

0 .

Loftus.

making payments, and contradicted, if she did not break, it, Meredith, j.a.
when she, long before that, endeavoured to make the oldest child
contribute towards the payments.

There could have been no contract unless the wife was bound
by it; and how was she in any sense bound? How could she have
been compelled by any one to make the payments? Nor was it
suggested, by any of the witnesses, that the husband was to retain
any separate legal right to an interest in the certificate, or to
any of the moneys which might become payable under it; so that,
if the wife had taken over the insurance, as she now claims, it
would not be for value; all the payments which she made would \

be voluntary and for her own benefit only; but that was not the
character or effect of the dealings between them; it was merely
the case, and the not uncommon case, of keeping up the payments
out of the family purse, as I have said. There is no suggestion
by any one that any kind of provision was made for the possibility
of the benefits of the certificate becoming available in the man’s
lifetime; that was never taken into consideration, as it must
have been if the parties were definitely contracting in regard to
the rights to accrue under the certificate. It was simply the
common case of the family taking up the burden of the payments,
when the head of the house became disabled from fully meeting
them. The man did not cease to pay, he continued to pay all
that he was able to pay; his earnings, though perhaps little, all
went into the family purse. No attempt was made to procure
an assignment of the certificate or of any rights under it, nor was
anything of the sort even suggested, as it doubtless would have
been if the man were to be precluded of all his rights under it. It
was the every day case of trusting to the husband and father not
to alter his will. It is out of the question to speak of any one as a
beneficiary for value of this certificate; such a contention is really
like catching at a straw to save oneself from drowning.

But, if any one had been meant to be a “ beneficiary for value,”
it would be in the teeth of the plainly and emphatically expressed
intention of the Legislature that no one can be a beneficiary for

220

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Clark

Loftus.

Meredith, J.A.

value unless expressly so designated in the certificate; and I
decline to attempt to dodge that enactment because I am carrying
a hard case which tempts me to do so. If the man had lived long
enough to become dissatisfied with his new home, and had gone
back to his old one, and had again changed the beneficiaries,
back to his wife and her daughter, a thing which might very well
have happened, I can hardly think the other daughter would be
held to be a beneficiary for value, although she took on, even,
a former understanding that if she paid the premiums the benefits
would be altogether hers.

There is no finding of want of mental capacity, on the part
of the man, to make the change of beneficiaries in question; really
the contrary has hitherto been found, and rightly so. The man
was, no doubt, much impaired in physical and mental vigour;
it may be that he was not either physically or mentally capable
of carrying on any trade or business, but many an one may be so
incapable, and yet capable of making a will; and in this case there
was unquestionable mental and physical capacity to make, and
thoroughly understand, the change of beneficiaries which he did
make — there can be no doubt he knew the simple fact that he was
taking from his wife and his daughter, by her, one-third each of
the $3,000 so paid under the certificate, and giving the whole sum
to his only child by a former wife, a thing which, wise or unwise,
just or unjust, he was determined to do; and there can be no doubt
that when doing it he knew that his wife had property of her own,
and that her son and daughter were able to earn, and were earning,
their own living; he knew a vast deal more than we can on the
subject of the moral righteousness or justness of his act.

Nor has it been found that there was any undue influence
exercised by any one over the man to bring about the change;
indeed, it seems to be plain that the intention originated in him-
self, arising, in part, at all events, in his dissatisfaction, whether
reasonable or unreasonable, with his own home, and in his desire
to leave it. There was nothing like exclusion from intercourse
with his wife and her children after he left the household; he was
indeed a frequent visitor there, according to the wife’s testimony,
even while the contest over the change of beneficiaries was being
waged in the society: —

“Q. You say he went to Mrs. Loftus in November. 1908;

XXVI.]

ONTARIO LAW REPORTS.

221

had he been at your house after that? A. Yes, he came over
next morning, and came over every other day for a week or so,
while he was able to go out.

“Q. Up to what date? A. I don’t know, but I know he came
over the whole time he was there, while he was able to go out;
while he was able to walk from Mrs. Loftus’s, he came over to
see me.

C. A.
1912

Clark

Loftus.

Meredith, J.A.

“Q. He was able*until after New Year’s; was he over after
New Year’s to your place? A. Well, I cannot say whether he
was or not; he was over, but he had two strokes in Mrs. Loftus’s
house. I did not know when he had them. I was not notified
of them.

“Q. Was he over after the first stroke? A. Yes, after the
first stroke he had at Mrs. Loftus’s.

“Q. That was about the New Year? A. Then he came over
after that.”

After the inability of the trial Judge — though so strongly
desirous of upsetting the transaction — to find undue influence,
and after the inability of the Divisional Court to do so, it would
be an extraordinary thing for this Court to do so, even if there
had been some substantial evidence of it, and even if the persons
concerned were not the reputable people the evidence shews them
to be.

If I were at liberty to substitute my will for. that of the dead
man in the distribution of this money, I would very willingly
cancel the later “ designation” and set up the earlier one, in
accordance with my sense of what would be fairer and juster, in
the dim light *which the case throws upon the knowledge which
the man had, and upon his real and full reasons for acting as he
did; but, as I have no manner of doubt that the change was made
by him of his own free will, I have no more power to alter it, accord-
ing to my notions of moral right and wrong, than he, if living,
would have to change my will.

I would allow the appeal and give effect to the change, which
was made under the statute, and so is not controlled by the rules
of the society. According to the practice of this Court, and, as
I understand, the consent of the appellant, the money paid by
the respondents or any of them in keeping the certificate in force,
with interest, should be repaid out of the fund in Court.

222

ONTARIO LAW REPORTS.

[VOL.

I have not gone into the question, dealt with by Mr. Justice
Clute, whether any such rule as that involved in the case of
Andrew v. Fulton is applicable to such a case as this; that is not
necessary; if the transaction were a contract, it would not apply;
if it were a gift merely, some such rule might very well be applied,
for after all it comes down to this simply: Was the act, mentally
and physically, really that of the donor?

Maclaren and Magee, JJ.A., agreed in allowing the appeal.

Garrow, J.A. (dissenting): — Appeal by the defendant from
the judgment of a Divisional Court affirming the judgment of
Middleton, J., in favour of the plaintiffs, upon the trial of an issue
between the parties as to the ownership of certain money in Court,
the proceeds of a policy on the life of the late James E. Clark.

James E. Clark was the husband of the plaintiff Jane Clark,
his second wife, and the father of the plaintiff May Clark. He
was also the father of the defendant, by his former wife.

The policy, dated the 6th March, 1893, was in the form of an
endowment certificate issued by the Independent Order of For-
esters, and the beneficiaries therein named were the plaintiffs
and the defendant in equal shares.

In the month of January, 1909, James E. Clark had a severe
stroke of paralysis, from which he never completely recovered-
Up to the month of November, 1909, he resided with his wife
and children, other than the defendant, in a house owned by his
wife, but on the 22nd of that month he left his home and went to
reside with the defendant, where he remained until his death on
the 16th February, 1910. After the stroke, he had been in the
habit of going frequently to the defendant’s house. Two days
before he went finally to reside with her, he informed her of his
intention to leave home.

In her evidence the defendant said: “About the 20th of No-
vember my father came to me, and he was crying; he started
crying and said they had another quarrel over home with Mrs.
Clark, and that he was not going to stand her nonsense any longer;
that, if I could not take and do anything for him, he would go
into some Home, and it was then we first spoke about his coming
to livejwith me. He came two days after that.”

C. A.
1912

Clark

Loftus.

Meredith, J.A.

XXVI.]

ONTARIO LAW REPORTS.

223

On the day that the deceased came to live with the defendant,
steps were taken to alter the apportionment of benefit under the
policy by giving it all to the defendant, and a written document
to that effect was prepared and executed by the deceased and sent
to the insurers, but had not been assented to by them in his life-
time. The defendant says that the suggestion came first from
the deceased; but, even on her own shewing, she seems to have
had no compunction in accepting the change, and even in assisting
her father to bring it about.

There had, as the plaintiffs contend, been an agreement be-
tween the deceased and the plaintiff Jane Clark, made several
years before his death, that, if she would keep up the payments
of premium on the policy, the deceased would not change the
apportionment. And, in pursuance of this arrangement, the
plaintiff and her daughter May had made a number of payments
of premiums. At the time of the first paralytic stroke, there
were some arrears. These were, at that time, paid by the defend-
ant, who continued to pay the premiums until her father’s death,
the total of such payments amounting to about $82.

There was conflicting evidence as to the mental condition
and capacity of the deceased at the time when the document
changing the apportionment was executed; the witnesses for the
plaintiff stating that he had then become weak in mind, as well as
in body, while those of the defendant considered him to be in his
normal condition, although weak in body.

Middleton, J., was of the opinion that the circumstances
brought the case within the rules as to testamentary dispositions
procured or brought about by a beneficiary, laid down in such
cases as Barry v. Butlin, 2 Moo. P.C. 480, and subsequent cases;
that, from the month of September before his death, “the old man’s
mind was in the extremity of weakness, and that he was not fit
to exercise testamentary powers, unless he had very careful
guidance to see that all proper precautions were taken to compel
him to realise the actual situation. . . I am not satisfied

that he had not testamentary capacity; but I think it is incumbent
upon those attempting to set up any testamentary act or any act
in the nature of a testamentary act to see that all extraneous
influence was excluded.” And that he should have received
advice from an absolutely disinterested and independent solicitor.

0. A.
1912

Cl auk

Loftus.

Garrow, J.A.

224

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

Clark

Loftus.

Garrow, J.A.

The learned Judge also expressed dissatisfaction with the explana-
tion of the transaction in its inception given by the defendant.
And he held that the agreement between the deceased and his
wife as to the payment of premiums operated to prevent the de-
ceased from changing the apportionment.

In the Divisional Court, Clute, J., delivered a judgment upon
practically similar lines, agreeing with Middleton, J.; and Mere-
dith, C.J., in a brief judgment, said that he agreed with Clute,
J., that the transaction was one which, under the circumstances,
could not stand, but declined to express an opinion upon the effect
of the agreement as to the payment of premiums made between the
deceased and his wife. Teetzel, J., agreed in the result. If the
plaintiffs’ case rested solely upon the agreement said to have been
made between the deceased and his wife, I would have had some
difficulty in following the conclusion of Middleton, J. I even
doubt whether, upon the whole evidence, an actual binding agree-
ment was ever made. The impression which I gather from the
evidence is, that the deceased, finding himself unable to continue
to pay, simply turned the matter over to his wife, advising her
that it would be to the advantage of the family to keep up the
payments. This, which is, I think, something less than a binding
agreement, would explain the application subsequently made by
the plaintiff Jane Clark to the defendant, to assist in keeping up
such payments, and possibly also the fact that the plaintiff Jane
Clark latterly did not keep them up. Nor, with deference, am
I able to agree that the case can be properly dealt with upon the
footing of a testamentary disposition procured by the defendant,
so as to admit of the application of the rule as to evidence in the
case of wills to which Middleton, J., refers.

The substantial issue between the parties, it seems to me,
arises upon the plaintiffs’ allegation of fraud and undue influence
on the part of the defendant in obtaining from the deceased the
execution of the document in question. And upon that issue,
which is alone quite sufficient to dispose of the whole case, I would
without hesitation find in favour of the plaintiffs.

The learned trial Judge found as a fact, upon conflicting evi-
dence, that at the time of the transaction the deceased was of
weak mind.

No consideration was paid or agreed to be paid by the de-

XXVI.]

ONTARIO LAW REPORTS.

225

fendant for the transfer. She knew her father’s condition and
circumstances, and also that the policy had been kept alive by the
plaintiffs, and must, therefore, have known that what, as she
alleges, he proposed to do was at least unfair, and even dishonest,
as against them. He came to the defendant, having left his own
home without any sufficient cause; and steps were immediately
taken, not to heal the breach, but to obtain the transfer now under
attack. Under these circumstances, the defendant was, I think,
bound to shew by satisfactory evidence, that the deceased thor-
oughly understood what he was doing, or at all events that he
had been protected by independent advice: see Phillips v. Mul-
lings, L.R. 7 Ch. 244, at p. 246; McCaffrey v. McCaffrey , 18 A.R.
599.

Middleton, J., who saw the witnesses, has expressed his dis-
satisfaction with the explanatory testimony adduced by the
defendant concerning the transaction; and it is not even pre-
tended that there was independent advice.

Under these circumstances, the transaction in question is
one which, in my opinion, cannot be supported; and the appeal
should be dismissed with costs.

Appeal allowed; Garrow, J.A., dissenting.

[IN THE COURT OF APPEAL.]

Re City of Toronto and Toronto R.W. Co.

Street Railways — Interchange of Traffic — Ontario Railway Act, 1906, sec.
57(6) — Application of — Order of Ontario Railway and Municipal
Board — Jurisdiction — Municipal Corporation — Railways not yet Con-
structed.

An order made by the Ontario Railway and Municipal Board, determin-
ing, ordering, and declaring that sec. 57 of the Ontario Railway Act,
1906, should apply to the Toronto Railway Company and to the rail-
ways owned and operated by that company, and to the Corporation of
the City of Toronto and the street railways to be constructed by that
corporation, was held to be beyond the powers of the Board.

Per Moss, C. J.O. : — The question turns upon the proper view to be taken
of sub-sec. (6) of sec. 57, read in connection with and in the light otf
the other portions of the section. Under sub-sec. (4) the powers of the
Board arise only when there has been inability to agree upon the
matters there specified. And these powers are confined to determining
in respect of these matters. Sub-section (6) enables the Board to deal
with street railways, but does not say that it is to do so under cir-
cumstances different from those under which they deal with steam
railways, by virtue of sub-sec. (4). There is no warrant for such a wide
departure from the manifest object and scope of the section as to
adapt it to a case where there are not two existing and operating lines
before the Board, upon application made by one or more of the parties
interested.

C. A.
1912

Clark

17 .

Loftus.

Garrow, J.A.

C. A.
1912

April 15

226

ONTARIO LAW REPORTS.

[VOL.

C.A.

1912

City of
Toronto
and

Toronto
R.W. Co.

Per Meredith, J.A.: — Reading the whole section together, and having
due regard to the purpose of the Legislature, gathered from the whole
Act, sub-sec. (-6) applies only to interchange between existing street
railways.

Per Magee, J.A. : — The word “company,” as used in sec. 57, does not in-
clude a municipality; and a municipality is not liable under sec. 57
to be compelled to interchange traffic with any street railway or other
railway company; and, therefore, that part of the order of the Board
which dealt with the city corporation and the railways to be constructed
by that corporation, was not within the powers of the Board. The
order with respect to the company’s railways would, if it stood alone,
be quite within the powers of the Board; yet, being made upon a non-
existent basis, and with a view to an impossible result, and made
without consideration of its effect upon the company with regard to
any other railway or street railway, it was not warranted in law
and should be declared invalid.

By an order made by the Court of Appeal on the 17th Novem-
ber, 1911, the Toronto Railway Company were allowed to appeal
to that Court from an order made by the Ontario Railway and
Municipal Board on the 24th June, 1911.

The order of the Board was made upon the application of the
Corporation of the City of Toronto, which application was as
follows : —

“The applicant hereby makes application for an order of the
Ontario Railway and Municipal Board, directing and ordering
the respondent to afford all proper and reasonable facilities for
the receiving and forwarding of passenger traffic upon and from
the several railways belonging to the respondent, and those to
be constructed by the applicant upon St. Clair avenue and
Gerrard street, in the city of Toronto; and providing for the
return of cars, motors, and other equipment belonging to either
the applicant or the respondent, and used for the purpose of
receiving or forwarding such traffic, so as to afford all passengers
on the cars of the municipal system passage over the tracks of
the respondent company as a continuous line of communication
without unreasonable delay and without prejudice or disadvan-
tage in any respect whatsoever, and so that no obstruction may
be offered in the use of the Toronto Railway system and lines
to be laid by the applicant as a continuous line of communica-
tion, and so that all reasonable accommodation may at all times
be mutually afforded by and to the said applicant and the said
respondent.

“And for an order that the respondent company and its rail-
way system shall be subject to and governed by the provisions
of sec. 57 of the Ontario Railway Act, 1906.”

XXVI.]

ONTARIO LAW REPORTS.

227

The order made by the Board was as follows: —

“1. This Board determines, orders, and declares that sec-
tion 57 of the Ontario Railway Act, 1906, shall apply to the
Toronto Railway Company and the street railways owned and
operated by the said company.

“2. This Board further determines, orders, and declares that
section 57 of the Ontario Railway Act, 1906, shall apply to the
Corporation of the City of Toronto and the street railways to
be constructed by it.”

Section 57 of the Ontario Railway Act, 1906, 6 Edw. VII.
ch. 30, is as follows: —

57. — (1) The directors of any railway company may at any
time, and from time to time, make and enter into any agreement
or arrangement with any other company, either in this Province
or elsewhere, for the regulation and interchange of traffic passing
to and from the railways of the said companies, and for the
working of the traffic over the said railways respectively, or for
either of those objects separately, and for the division and ap-
appointment of tolls, rates and charges in respect of such traffic,
and generally in relation to the management and working of the
railways, or any of them, or any part thereof, and of any rail-
way in connection therewith, for any term not exceeding twenty-
one years, and to provide, either by proxy or otherwise, for the
appointment of a joint committee or committees for the better
carrying into effect such agreement or arrangement, with such
powers and functions as may be considered necessary or ex-
pedient, subject to the consent of two-thirds of the shareholders,
voting in person or by proxy.

(2) Every railway company shall, according to their respec-
tive powers, afford all reasonable facilities to any other railway
company for the receiving and forwarding and delivering of
traffic upon and from the several railways belonging to or worked
by such companies respectively, and for the return of carriages,
trucks, and other vehicles; and no such company shall give or
continue any preference or advantage to or in favour of any par-
ticular company, or any particular description of traffic, in any
respect whatsoever, nor shall such company subject any par-
ticular company or any particular description of traffic to any
prejudice or disadvantage in any respect whatsoever; and every

C. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

228

ONTARIO LAW REPORTS.

a a.

1912

City of
Toronto
and

Toronto
R.W. Co.

[VOL.

railway company having or working a railway which forms part
of a continuous line of railway, or which intersects any other
railway or which has a terminus, station or wharf of the one near
a terminus, station or wharf of the other, shall afford all due
and reasonable facilities for receiving and forwarding by the one
of such railways, all the traffic arriving by the other, without
any unreasonable delay and without any such preference or
advantage, or prejudice or disadvantage as aforesaid, and so
that no obstruction may be offered in the using of such railway
as a continuous line of communication, and so that all reasonable
accommodation may at all times, by the means aforesaid, be
mutually afforded by and to the said several railway companies.

(3) If any officer, servant or agent of a railway company,
having the superintendence of the traffic at any station or depot
thereof, refuses or neglects to receive, convey or deliver at any
station or depot of the company for which they may be destined,
any passenger, goods or things, brought, conveyed or delivered
to him or to such company, for conveyance over or along the
railway from that of any other company, intersecting or coming
near to such first-mentioned railway, or in any way wilfully
contravenes the provisions of the next preceding sub-section —
such first-mentioned railway company, or such officer, servant
or agent, personally, shall, for every such neglect or refusal, incur
a penalty not exceeding $50 over and above the actual damages
sustained.

(4) In case any company or municipality interested is unable
to agree as to the regulation and interchange of traffic or in
respect of any other matter in this section provided for, the
same shall be determined by the Board.

(5) All complaints made under this section shall be heard and
determined by the Board.

(6) This section shall apply to such street railways as may
from time to time be determined by the Board.

January 22. The appeal was heard by Moss, C.J.O.,
Garrow, Maclaren, Meredith, and Magee, JJ.A.

H. S. Osier, K.C., for the appellants, argued that the Board
had no power under sec. 57 (6) of the Ontario Railway Act to
make the order in question. The language of the Act could only
refer to railways in existence, and was not intended to enable

XXVI.]

ONTARIO LAW REPORTS.

229

a corporation desirous of building a railway to ascertain in ad-
vance the terms upon which it could interchange traffic with
an existing railway. The statute shews that the Board must
have all the facts before it before making such an order, and
the necessary evidence has not been obtained in the present case.

H. L. Drayton, K.C., and G. A. Urquhart, for the respondents,
argued that the question at issue was merely an academic one,
as the city’s railways would soon be finished. The jurisdiction
of the Board to make the order appealed against is plain under
sec. 57 (6) of the Act, and the appellants are not entitled to rely
on the absence of evidence which they could have supplied at
the hearing, if they had desired to do so.

Osier, in reply, argued that the question was not merely
academic; and, even if it were, the statute should not be con-
strued in the way suggested by the respondents, in the absence of
clear and specific words to the effect contended for.

April 15. Moss, C.J.O.: — In the view which I take of the
question raised by this appeal, it is not necessary to discuss or
consider at length many of the arguments which were forcibly
presented against and in support of the order appealed from.

As a practical operative order, it works no substantial advan-
tage to the city and it imposes no real disadvantage upon the
company. It settles nothing of a practical nature, and, as a
declaratory order, does nothing towards making effective the
provisions of sec. 57 of the Ontario Railway Act, 6 Edw. VII.
ch. 30, as between the parties hereto.

Whether, if the Board had the power to issue the order, it
rightly exercised it, is a question with which we have no con-
cern. It is right to assume that, when its power to determine
is invoked, the Board will not undertake to determine without
having first informed itself of all the existing conditions,
and considered whether the circumstances shewn make it just
and proper to put the provisions of the section into effect as
between the street railways then before it.

The question of power turns, as it appears to me, upon the
proper view to be taken of sub-sec. (6) of sec. 57 of the Railway
Act, read, of course, in connection with and in the light of the
otherjportions of the section.

0. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

230

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

Moss, C.J.O.

I am unable to satisfy myself that in this case the circum-
stances had arisen which, upon a careful study of the section,
I think must occur before the power under sub-sec. (6) is called
into action.

It is, of course, undeniable that primarily the provisions of
the section deal only with steam railways, and are intended to
govern the regulation and interchange of traffic between trans-
portation agencies of that character. And it is also quite plain
that the legislation contemplates existing operating companies
actually engaged in carrying traffic, which includes, no doubt,
passengers, as well as goods. Thus sub-sec. (1), providing for
agreements between companies speaks of “traffic passing to and
from the railways of the said companies,” of “the working of
the traffic over the said railways,” of “the division and appor-
tionment of tolls, rates and charges in respect of such traffic,”
and of “the appointment of a joint committee or committees for
the better carrying into effect such agreement.” So, too, sub-
sec. (2), imposing upon a company an obligation to afford facili-
ties to other companies, speaks of “the receiving and forwarding
and delivering of traffic,” of “the return of carriages, trucks,
and other vehicles,” of a company “having or working a railway
which forms part of a continuous line of railway, or which inter-
sects any other railway,” of the duty of such a company to
“afford all due and reasonable facilities for receiving and for-
warding by the one of such railways, all the traffic arriving by
the other.” Again, sub-sec. (3), dealing with penalties, speaks of
refusal or neglect “to receive, convey or deliver at any station
or depot of the company for which they may be destined, any
passenger, goods or things, brought, conveyed or delivered . . .
for conveyance over or along the railway from that of any other
company, intersecting or coming near to such first-mentioned
railway.”

All these point plainly and unmistakably, not to projected
or contemplated railways, but to railways actively engaged in
the business of conveying passengers and goods upon and over
their lines. It is only when they are found in that condition
that they can be usefully rendered available for carrying out the
objects aimed at.

Sub-section (4) brings the Board into requisition where there

XXVI.]

ONTARIO LAW REPORTS.

231

is a failure or inability to agree as to the regulation and inter-
change of traffic or any other of the matters provided for, and
empowers it to determine upon an agreement according to the
terms of which the mutual services prescribed by the previous
portions of the section shall be performed by the parties interested.

But, before the Board’s powers can come into play, it must
find, and be prepared to deal with, a case of (a) at least two
existing operating companies, engaged in receiving, forwarding,
and delivering traffic with railways forming parts of a continuous
line or intersecting each other or having termini, stations, or wharves
near to each other; in fine, operating and carrying on the busi-
ness of transportation of passengers or freight or both under
the circumstances detailed in the preceding portion of the sec-
tion; and (b) inability to agree as to the regulation and inter-
change of traffic or in respect to the other matters provided for.

Now, is there anything in sub-sec. (6) to shew that in the
case of street railways there is to be any different mode of treating
the matter?

It says “this section,” that is, the preceding provisions of the
section, “shall apply to such street railways as may from time
to time be determined by the Board.” Is it intended by this
enactment to do more than to apply the provisions of the sec-
tion to street railways which the Board shall find holding towards
each other, relatively at least, the same position as steam rail-
ways? That it was not so intended seems to be manifest from
the language. Under sub-sec. (4) the powers of the Board arise
only when there has been inability to agree upon the matters
there specified. And these powers are confined to determining
in respect of these matters. Sub-section (6) enables the Board
to deal with street railways, but does not say that it is to do so
under circumstances different from those under which they deal
with steam railways, by virtue of sub-sec. (4). In other words,
the Board, when it finds two or more existing operating street
railways before it, upon application made by one or more of the
parties interested, is to determine whether, as regards the street
railways before it, there is a case proper for intervention under
sub-sec. (4). It may be that the Board should have regard,
upon such an application, to the differences in methods of trans-
port and the conduct of business between the two systems; but

0. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

Moss, C.J.O.

232

ONTARIO LAW REPORTS.

[VOL.

0. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

Moss, C.J.O.

there does not appear to be any warrant for such a wide departure
from the manifest object and scope of the section as to adapt it
to a case where there are not two existing and operating lines
before the Board upon the application.

The application is intended to result in something practical
in the form of an order determining the terms and conditions
upon which the regulation or interchange of traffic is to take
place. There is no indication anywhere that the Board is to
deal with any but a state of circumstances outlined in sub-
sec. (4).

For these reasons, I think that, under the then existing cir-
cumstances, the order made was not within the SGope of the
Board’s powers under sec. 57, and that it should not stand.

The appeal should be allowed, with the usual result as to
costs.

Garrow and Maclaren, JJ.A., concurred.

Meredith, J.A. : — The main part of the respondents’ applica-
tion to the Board makes manifest its premature character; it is
in these words: —

“The applicant hereby makes application for an order of the
Ontario Railway and Municipal Board, directing and ordering
the respondent to afford all proper and reasonable facilities for
the receiving and forwarding of passenger traffic upon and from
the several railways belonging to the respondent, and those to
be constructed by the applicant upon St. Clair avenue and Gerrard
street, in the city of Toronto; and providing for the return of
cars, motors, and other equipment belonging to either the appli-
cant or the respondent, and used for the purpose of receiving or
forwarding such traffic, so as to afford all passengers on the cars
of the municipal system passage over the tracks of the respondent
company as a continuous line of communication without un-
reasonable delay and without prejudice or disadvantage in any
respect whatsoever, and so that no obstruction may be offered
in the use of the Toronto Railway system and lines to be laid by
the applicant as a continuous line of communication, and so
that all reasonable accommodation may at all times be mutually
afforded by and to the said applicant and the said respondent.”

XXVI.]

ONTARIO LAW REPORTS.

233

To an ordinary mind it must seem extraordinary, at the least,
for any one to apply for an interchange of passenger traffic, cars,
motors, and other equipment, not only without having any to
interchange, but without having even a railway to run them
over; indeed, so extraordinary that, although the Board was
plainly anxious to aid the applicant all it could, this part of the
application is not even adverted to in the formal order made by
it upon the application.

The earlier provisions of the enactment in question — the
Railway Act, sec. 57 — make it clear to me, upon their face, that
they relate only to existing railways. The agreement which rail-
way companies may make is for the “ interchange of traffic passing
to and from the railways” of such companies: evidently existing
railways capable of actually making such an interchange; and
in practice almost necessarily so. Then every railway company
is to afford reasonable facilities to any other railway company
for receiving, forwarding, and delivering traffic upon and from
the several railways belonging to or worked by such railway
companies respectively; again, existing railways, of course. And
then a penalty is provided for refusal or neglect to forward traffic
over, necessarily, an existing railway.

All this seems to be so plain, and so, for practical purposes,
necessary, that there was little, if any, controversy over it: but
it was urged, for the respondents, that, under sub-sec. (6) of
sec. 57, the Board had power to determine that that section
should apply to the appellants’ railway: Mr. Drayton seemed
to take refuge in this last ditch; but, If or several reasons, in my
opinion, he cannot hold it: in the first place, the order in ques-
tion was not made upon the Board’s own motion, but was based
entirely upon the respondents’ application, upon which they can
take nothing and which they had no power to make; and, there-
fore, the order was made without jurisdiction: in the second
place, the Board had no intention to make, and did not make,
any such order; its order was intended to embrace, and does
in terms embrace, both parties to the application and the rail-
way of the one and the proposed railway of the other: to strike
out that part of the order which relates to the respondents, and
their proposed railway, and to let the rest stand, would be to make
a new, and different, order, of a very different character and

C. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

Meredith, J.A.

16 — XXVI. O.L.R.

234

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

Meredith, J.A.

effect, from that intended to be made, and actually made, by
the Board; and one which, I can hardly think, they would have
thought of making; and which, if they had made it, could not,
in my opinion, stand. The purpose of the Board was to make
provision so that there should be an interchange of traffic be-
tween the railway of the appellants and that of the respondents,
when it comes into existence; and that alone was the purpose
of the application to them by the respondents. Take away the
order against the respondents, and what remains is something
never contemplated by the parties or the Board, and which,
I should imagine, no one desires. It would give the prospective
railway of the respondents nothing: they would be obliged to
apply again to the Board when they have a real railway, not
merely power to build it; whilst the effect upon the appellants
and their railway would be this, that they would be bound to
interchange traffic, including carriage trucks and other vehicles,
with every “ steam’ ’ railway under the legislative power of the
Legislative Assembly; and also with any other street railway,
municipal or otherwise, which the Board might see fit to bring
into the provisions of sec. 57, or which is already within them,
under sub-sec. (6); that is, of course, if the Board’s power be as
wide under that sub-section as the respondents contend for; but,
lastly, its power under that sub-section is, in my opinion, much
narrower than that, and does not extend to the making of an
unlimited order of that character. Reading the whole section
together, and having due regard to the purpose of the Legis-
lature, gathered from the whole Act, sub-sec. (6) applies only
to interchange between existing street railways: it does not
authorise the making of an omnibus order against any street
railway company, putting upon it an obligation to interchange
with every sort of a railway under provincial legislative power,
with the limitation only that, as to other street railways, an
omnibus order shall be made respecting % them. The very nature
of the thing seems to me to require that the order shall be limited
to two or more definite existing railways, to be made only after
a consideration of the particular case in the public interests, as
well as of the interests of the companies directly concerned.
The respondents cannot want — indeed, it would be obviously
against their interests to want-*-the appellants’ railway thrown

XXVI.]

ONTARIO LAW REPORTS.

235

open to others and not to them: their need is, interchange be-
tween their railway when built and that of the appellants, but
only if that can be beneficially accomplished; and they ought
not, merely to save themselves from the position of having failed
altogether in their application, to catch at and try to hold on to
something that does them no good, but harm, as well as grievously
and needlessly hampering the appellants’ already overloaded
railway. It is quite true that the applicants ought not to be
delayed until the last spike of their construction is driven; but,
on the other hand, it is. at least equally plain that they ought not
to begin their application before the first spike is driven; it can
hardly be that even the first spike constitutes a “ railway.” The
pitiful picture painted by the Chairman, of waste in the dupli-
cating of works, is almost, if not altogether, a fanciful one only;
and one which, if there really could be anything in it, would not
be got rid of, or even ameliorated, by the order in question,
which gives nothing to the respondents; until the final agree-
ment, or order, for interchange, should be made, there would
be just as much uncertainty as there is now; an uncertainty
which cannot really affect materially, if in any way, the mode
of construction of the proposed railway.

A much more real picture of that character might be drawn
from a study of the effect of an unlimited order adding to the
burden of already overcrowded cars, and overburdened rails,
complaint, inconvenience, and bad feeling, as well as to the
danger to life and limb which that burden already carries.

There is obviously a vast difference, in this respect, between
“steam” railways and street railways; to the former, with their
comparatively infrequent trains and the matter of merely attach-
ing other cars to them, the freest interchange is, generally speak-
ing, manifestly in the public interests, as well as in the interests
of all else concerned; between street railways, with already over-
crowded rails, as well as cars, cars which are run separately, and
when it may be practically necessary to send not only the car
but also the crews of the one company over the lines of the others,
a very different, and a much more difficult, problem arises, and
one which can be fairly dealt with only when the railways are
in existence and after the most careful consideration of all the
then existing circunstances — circumstances which are changing,

0. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

Meredith, J.A.

236

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[VOL.

0. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

Meredith, J.A.

in some respects, from time to time, and with especial regard to
lesening rather than running any risk of increasing the already ter-
rible toll of lost life and limb in street railway accidents.

I can have no manner of doubt that, if the position of the
parties were reversed, if the municipality were the owners and
operators of the central system, and some private corporation
were projecting the outlying railway, this particular application
would be generally scoffed at.

I am in favour of allowing the appeal, and discharging the
order in question altogether.

Magee, J.A.: — The by-law and orders of the Ontario Rail-
way and Municipal Board under which the City of Toronto Cor-
poration is acting were not before us on the argument, but were
before that Board, or at least within its cognizance upon the
city corporation’s application for the order now in appeal. A
copy of by-law No. 5626, which will be referred to, has since been
put in, and also a copy of the opinion of the Board, dated the
23rd June, 1911, approving of the plans and profiles submitted
by the city as to car lines on Gerrard street and Coxwell avenue
and on St. Clair avenue.

The appellants, the Toronto Railway Company, own and
operate the street railway within what was formerly the city of
Toronto, but new territory has since been added to the city, and
the proposed street railways of the city or some of them are to
be within the new territory.

As a municipal corporation, the city would be enabled under
sec. 569 of the Consolidated Municipal Act, 1903 (as amended
in 1906 by 6 Edw. VII. ch. 34, sec. 21, and in 1910 by 10 Edw.
VII. ch. 81, sec. 4), to pass, with the assent of the electors, a by-
law for building, equipping, maintaining, and operating street
railways along such streets and subject to and upon such terms
as the Lieutenant-Governor in Council might approve, and for
leasing the same from time to time, and for levying an annual
special rate to defray the interest and principal of the expendi-
ture. No other statutory authority is referred to as empowering
the city to construct or operate a street railway. By the Ontario
Railway and Municipal Board Act, 1906, 6 Edw. VII. ch. 31,
sec. 53, that Board is given the powers of the Lieutenant-Governor

XXVI.]

ONTARIO LAW REPORTS.

237

in Council as to approval or confirmation of such by-laws. By
the Ontario Railway Amendment Act, 1910 (10 Edw. VII. ch.
81, sec. 3), a railway company shall not, without first obtaining
the permission of the Board, begin the construction of a railway
upon a highway, and this shall apply to a street railway; and by
the Ontario Railway Act, 1906 (6 Edw. VII. ch. 30), sec. 2 (21),
a “street railway” is declared to mean a railway constructed
or operated along a highway under or by virtue of an agreement
with or by-law of a city or town. Thus the Board’s approval of
the by-law (or that of the Lieutenant-Governor in Council) would
be necessary, and also the Board’s permission, before beginning
the construction on the streets.

A by-law was passed by the city council with a view to the
construction of some street railway lines. In the Board’s reasons
for the order, of the 24th June, 1911, now in appeal, it is stated
that “the city submitted a by-law to the ratepayers to authorise
the issue of debentures to the amount of $1,157,293, to pay for
the construction and equipment of street railways upon certain
streets to be selected by the council, with the approval of this
Board. The by-law was carried by an overwhelming majority.”
The Board then goes on to state: “On the 25th April last, the
city made an application to the Board for the approval of the
plans for the construction of the civic car lines on Gerrard street
and Coxwell avenue from Greenwood avenue to Main street,
and on St. Clair avenue from Yonge street to the Grand Trunk
Railway crossing. The Board, in an opinion dated the 6th May,
1911, declined to approve the plans and profiles until the city
furnished us with particulars of the whole scheme for building,
equipping, maintaining, and operating the civic car lines. We
stated in that opinion that we required to know all the streets
the city intended to use for the lines, the mileage, the kind of
rail, the character of the construction, kind of car barns and
repair shops, the number and kind of cars to be operated, and
an estimate of the cost of construction, operation, and main-
tenance, and of the revenue to be derived from the enterprise.
The city have complied with this demand of the Board, and
have furnished us with the required particulars and details of
the scheme. The Board have approved of the plans and pro- *
files and of the scheme generally. We are informed that the

0. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

Magee, J.A.

238

C. A.
1912

City of
Toronto

AND

Toronto
R.W. Co.

Magee, J.A.

ONTARIO LAW REPORTS. [vol.

city have ordered the rails and other material necessary for the
construction of the lines.”

We find in the statutes of 1911 (1 Geo. V. ch. 119, sec. 8)
that a city by-law No. 5626, passed on the 23rd January, 1911,
for the raising of $1,157,293, the amount mentioned by the Board,
was declared valid.

In the letter of the 5th May, 1911, to the company’s manager,
counsel for the city stated: “As you know, the different routes
under contemplation by the city, and for which the by-law has
been passed by the people, are as follows: (1) St. Clair avenue
(2) Davenport road and Bathurst street
(3) Rosedale loop ... (4) Danforth avenue . . . (5)

Gerrard and Main street. . . .” The letter goes on to state

the estimated cost of constructing a double track with an 80 lb.
rail on each of these routes.

So far as appears, by-law No. 5626 is the only by-law passed.
It recites that by a report of the board of control, adopted in
council, “ it is recommended that a by-law should be passed to pro-
vide for the issue of debentures to the amount of $1,157,293 for the
purpose of building and equipping street railways, and of laying
permanent pavements upon the railway portions upon certain
streets of the city;” and that the council had determined to issue
debentures to that amount, “for the purpose of raising the amount
required to pay for the construction and equipment of street rail-
ways upon certain streets to be selected by the council, with the
approval of the Ontario Railway and Municipal Board, in those
parts of the city annexed thereto since September, 1891, and for the
laying down of permanent pavements upon the railway portions of
such streets.” The by-law then authorised the issue and sale of the
debentures, “and the proceeds thereof . . . shall be applied

for the purposes above specified, and for no other purpose.”

It would thus appear that the by-law does not specify any street
for the railway, but leaves that to future selection by the council.
The issue of debentures is made valid by the statute, and no
objection is taken here as to the validity or sufficiency of the by-
law otherwise, or to the right of the city to proceed with the
construction and operation of the proposed lines. Objection is
made, however, that the mere right to construct, and even an
authorised plan for construction, does not suffice for the applica-
tion now in question.

XXVI.]

ONTARIO LAW REPORTS.

239

On the 5th June, 1911, the city gave the company notice of
the application out of which this appeal arises, and the applica-
tion was heard on the 21st June. No evidence was offered be-
yond putting in some letters which had passed between the
parties, each inviting proposals from the other.

The permission of the Board for the construction had not
been given when the application was heard. The information
which the Board had required was received by it only on the
previous day, the 20th June, and the company’s counsel was not
aware that it had been furnished. The Board’s approval is dated
the 23rd June. The order appealed from, though not dated,
is stated to have been made on the 24th June.

The city notified the company of its intention to apply to the
Board for two things: an order to the company to afford all
proper facilities for what may be called interchange of passenger
traffic and cars between the company’s street railway and two
of the city’s lines, namely, those on St. Clair avenue and Gerrard
street; and an order that the company and their railway system
shall be subject to and governed by the provisions of sec. 57 of
the Ontario Railway Act, 1906. The Board did not grant the
application for an order for interchange. It was hardly asked
for, but recognised as premature, and indeed asserted by the
city to be a matter for subsequent action. But the Board did
make an order declaring that sec. 57 should apply to the company
and its street railways, and also declaring that it should apply
to the city corporation “and the street railways to be constructed
by it.” The latter declaration had not been specifically asked
for.

The company appeal, on the ground that the Board had no
jurisdiction to make such an order against them, at the instance
of the city, or with a view to interchange with the non-existent
city railways.

The Ontario Railway Act, 1906 (6 Edw. VII. ch. 30), in sec.
3, incorporates the Act with the special Act, and declares that it
applies to “all persons, companies, railways (other than Govern-
ment railways) and (when so expressed) to street railways within
the legislative authority of the Legislature of Ontario;” but no
section of the Act shall “apply to street railways unless it is so
expressed and provided.” Section 5 is to the like effect.

C. A.
1912

City of
Toronto

AND

Toronto
R.W. Co.

Magee, J.A.

240

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

Magee, J.A.

Section 57, in sub-sec. (1), provides that “the directors of any
railway company may at any time, and from time to time, make
and enter ' into any agreement or arrangement with any other
company, either in this Province or elsewhere, for the regula-
tion and interchange of traffic passing to and from the railways
of the said companies, and for the working of the traffic over
the said railways respectively, or for either of those objects
. for any term not exceeding twenty-one years,” and
to “provide . . . for the appointment of a joint committee

or committees for the better carrying into effect such agreement
or arrangement . . . subject to the consent of two-thirds

of the shareholders, voting in person or by proxy.” Sub-section
(2) provides that “every railway company shall . . afford

all reasonable facilities to any other railway company for the
receiving and forwarding and delivering of traffic upon and from
the several railways belonging to or worked by such companies
respectively, and for the return of carriages, trucks, and other
vehicles;” and no such company is to give any preference or
advantage to any particular company or description of traffic,
or subject any to prejudice or disadvantage; and “every rail-
way company having or working a railway which forms part
of a continuous line of railway, or which intersects any other
railway or which has a terminus, station or wharf of the one near
a terminus, station or wharf of the other,” shall afford facilities
for receiving and forwarding by the one all the traffic arriving
by the other and so that no obstruction may be offered “in the
using of such railway as a continuous line of communication.”
Sub-section (3) imposes penalties on the employees of a “rail-
way company” refusing or neglecting to receive, convey, or de-
liver traffic from the railway of “any other company.” Sub-
section (4) declares that “in case any company or municipality
interested is unable to agree as to the regulation and interchange
of traffic or in respect of any other matter in this section provided
for, the same shall be determined by the Board.” And sub-sec.
(5) reads: “All complaints made under this section shall be heard
and determined by the Board.” If the section stopped there, it
would not apply to street railways. But sub-sec. (6) is added,
which declares that ‘ This section shall apply to such street rail-
ways as may from time to time be determined by the Board.”

XXVI.]

ONTARIO LAW REPORTS.

241

The word “company,” in the expressions “any railway com-
pany,” “every railway company,” and “any other railway com-
pany,” used in sec. 57, is not, I think, governed by the inter-
pretation given in sec. 2 to the expression “the company,” and
should, therefore, be interpreted in its natural sense, and would
not include a municipal corporation. And, as only companies
are mentioned, it could not be intended that municipalities or
their railways could be made subject to it. But then, it may
be said, that, under sec. 569 of the Municipal Act, the munici-
pality has the same rights, powers, and liabilities as street rail-
ways and companies (which must mean all, not some, of such
railways and companies) under the Street Railway Act (R.S.O.
1897, ch. 208), which is now replaced and repealed by the Ontario
Railway Act, 1906. By the Interpretation Act, R.S.O. 1897,
ch. 1, sec. 8 (now 7 Edw. VII. ch. 2, sec. 7), the sections of the
Ontario Railway Act, 1906, corresponding to those of the Street
Railway Act, would be applicable. In the Street Railway Act
and the amendments before 1906, there was no provision requiring
interchange, though there was a right to agree to interchange.
Section 57, apart from sub-sec. (6) , does not relate to street rail-
ways at all, and even with sub-sec. (6) does not relate to all
but only to some street railways — perhaps to none in the Province
other than these two. It cannot then be said that sec. 569 makes
interchange a right or liability of the municipality. The only
view in which it might be claimed that the municipality would
be made subject to sec. 57 is, that it is subject to the jurisdiction
of the Board, and liable to have an order made by the Board
under that section — but that is not, I think, in any sense, one
of the “liabilities” contemplated by sec. 569. I am, therefore,
of opinion that a municipality is not liable under sec. 57, any
more than a Government railway, to be compelled to interchange
traffic with any street railway or other railway company. I may
here add that the use of the word “municipality” in sub-sec. (4)
does not help a contrary view; it is manifestly used in respect
of rights other than as proprietors of a railway, and its use there,
as contradistinguished from “company,” when it is not used
elsewhere in the section, rather supports the view that “company”
does not include “municipality.”

It is noticeable that sub-sec. (6) of sec. 57 uses the words “street

C. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

Magee, J.A.

242

ONTARIO LAW REPORTS.

C. A.
1912

City of
Toronto

AND

Toronto
R.W. Co.

Magee, J.A.

[VOL.

railways.” “Street railway” is defined in sec. 2 (21) as meaning
a railway “constructed or operated” along a highway, as already
mentioned. Had sub-sec. (6) used the words “the company,”
they are defined as meaning “the company or person” (which
would, under the Interpretation Act, include “corporation”)
“authorised by the special Act to construct.” The city’s street
railway is authorised, but it is not yet commenced, much less
constructed or operated. But, as the interchange of traffic could
not take place till constructed and operated, I do not see that
the Board must wait until that stage before making the declara-
tion that sec. 57 shall apply to it, when constructed and operated.
As pithily put by the Board, “that the proposed civic lines will
be built is as certain as taxes.” The Board do not make such
a declaration in the dark. As appears from the quotation above
made from their reasons, they know the routes and the gauge,
and sufficient particulars to enable them to judge whether it is
proper that a particular street railway should be made liable to
interchange at all. The Legislature has constituted the Board
for the very purpose of exercising its discretion, and it is not to
be assumed that the Board would in any case act in the dark or
without full information on all points necessary for arriving at
a decision. The liability to interchange is one thing, the terms
of the interchange another.

I have been dealing with the question of the power of the
Board to determine that the city or its street railway shall be sub-
ject to sec. 57. That it has such power with regard to the street
railway of the appellant company is not disputed. That power
it may exercise of its own motion or on the application of any
one interested, and, under sec. 17 of the Ontario Railway and
Municipal Board Act, it can decide conclusively who is a party
interested; and I do not see anything in the Act to prevent the
city corporation, owning or not owning a street railway, or a Board
of Trade, or a body of merchants, or an individual, from being
considered by the Board to be a party interested sufficiently to
set the Board in motion if the Board did not choose to take action
itself.

Wejthen come to consider the order appealed from. It is
in fact two orders combined in one. It is not an order that
sec. 57^shall apply as between these two street railways, or^shall

XXVI.]

ONTARIO LAW REPORTS.

243

apply to each as regards the other. It contains an absolute and
unlimited declaration that the section shall apply to the com-
pany and its street railway. And then it contains an equally
absolute and unlimited declaration as to the city and the “street
railways to be constructed by it.” It is not restricted to those
coterminous with the company’s railway nor to those on St.
Clair avenue and Gerrard street, nor even to those to be con-
structed under the existing by-law; but this appeal has no con-
cern with any objection on that score. The effect is that, if
sec. 57 is to apply to the company, it applies to it not merely to
require interchange with the city’s street railway, but with all
street railways, if not all railways of any sort to which sec. 57
from time to time applies.

C. A.
1912

City of
Toronto
and

Toronto
R.W. Co.

Magee, J.A.

That brings us again to consider sub-sec. 6. Several meanings
may be put forward for it. One is that the Board may apply sec.
57 not to one or more specified street railways, but to a class or
to such as answer certain requirements. This order would not
comply with that interpretation. Another meaning might be
argued for — that the Board could apply sec. 57 not to any one or
more certain specified street railways, but only as between two or
more specified street railways — so that, in fact, it would not
wholly apply to any one of them — that is, it would not apply to
it as regards railways not mentioned. This order does not com-
ply with that meaning.

Then the only remaining construction, and the one which is,
in my opinion, the correct one, is, that the Board may do what,
if we could judge only by the formal order, it has done here,
that is, decide whether or not sec. 57 shall apply to a particular
railway, whatever the result may be.

If the Board chooses to do that with regard to the street
railway of the appellant company, or any other company to
which the Ontario Railway Act applies, I do not see anything
to prevent it. What the effect upon that company may be is
another question. Does it become liable to interchange with
all railways which are subject to sec. 57, or only with street
railways? The section is to be construed not merely with refer-
ence to Toronto alone, but with reference to the whole Province.
There might well be places in which a street railway would be
the only connecting link between two lines of steam railways,

244

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

City of
Toronto
and

Toronto
K.W. Co.

Magee, J.A.

and in which it might be constructed with a view to being a con-
necting link, as street railways are not limited to carriage of pas-
sengers, and street railways continue to be street railways for a
mile and a half outside the city or town. It might be to the public
interest that such a street railway should be both entitled and
liable to interchange with lines of steam railway.

In my opinion, the Board cannot limit the application of
sec. 57, if it declares that that section applies to the appellant
street railway or any other. It cannot say how far that section
shall apply, or that it shall apply only to a limited extent, or
with regard to one railway or one street railway.

If two companies to which the section applies are subsequently
unable to agree, and the intervention of the Board becomes
necessary, it may find interchange impracticable, and decline to
make an order between them, or may have to require conditions
which would not be acceptable to an applicant. But that is a
different matter from assuming to exercise, under sub-sec. (6),
the right to limit the application of the section.

Although the order appealed from, in form, purports to be
separate applications of sec. 57 to each of these street railways,
it is not stated just what view the members of the Board took
of the meaning of the sub-section. But in their reasons they in
every instance couple the two roads together. For instance,
it is stated: “The application is made by the city against the
Toronto Railway Company for the purpose of securing an inter-
change of traffic between the civic car lines and the company's
street railway system, and with that view to have it declared
that sec. 57 of the Ontario Railway Act of 1906 applies to the
company and the city street railway . . . We do not think

we require to wait until the last spike is driven before deter-
mining that sec. 57 . . . shall apply to the city’s and the

company’s street railways. To do so would result in useless
and wasteful duplication . . . There should be an inter-

change of traffic; and, therefore, we make the determination
asked for by the city.” The Board also expressed its opinion
that it would be in the public interest, when the city had com-
pleted and equipped the railway, to arrange for its operation
with the present street railway as one system. Nowhere does

XXVI.]

ONTARIO LAW REPORTS.

245

the Board deal with the propriety of making sec. 57 applicable
to any one road alone.

It is, I think, evident that, although the city had only asked
for the application of sec. 57 to the company’s street railway,
the Board was not considering the application of the section to
either railway apart from the other — and was making the declar-
ation only with respect to the company’s railway, because it
was also making a similar declaration with regard to the city’s
railway. The reasons of the Board for its decision are signed by
all the members, and are before this Court, and it is evident
that, if the city was not to be liable to interchange, no order would
have been made in respect of the company alone, and that the
order was only made for the purpose of interchange between these
two railways. Taking, as I do, the view that the Board could
not apply sec. 57 to the city railways, it follows, I think, that,
although the order with respect to the company’s railways would,
if it stood alone, be quite within the powers of the Board, yet,
being made upon a non-existent basis, and with a view to an
impossible result, and made without consideration of its effect
upon the company with regard to any other railway or street
railway, it was not warranted in law and should be declared
invalid.

Whether, in view of the provisions of sec. 21 of the Ontario
Railway and Municipal Board Act, 1906 (6 Edw. VII. ch. 31),
restricting the Board’s power to interfere with a company’s
rights or duties under an agreement, any practical beneficial
result would be attained by the application of sec. 57 of the
Ontario Railway Act, may give rise to serious consideration. The
Board have a very desirable end in view, and it is to be hoped
that the good sense and public spirit of both parties will lead them
to it.

C. A.
1912

City of
Toronto

AND

Toronto
R.W. Co.

Magee, J.A.

Appeal allowed.

246

ONTARIO LAW REPORTS.

1912
April 16

[MIDDLETON, J.]
Livingston v. Livingston.

[vol.

Partnership — Account — Profits of Separate Business Carried on by one
Partner — Assent of other Partner — “ Competing ” Business — Sale of
Property of Firm after Death of one Partner — Purchase by Trustee for
Surviving Partner — Adequacy of Price — Liability to Account for
Profits on Resale — Allowance to Surviving Partner for Services in
Liquidation — Trustee Act, sec. 40 — Trustee — Express Trustee.

One of two members of a partnership carrying on business in Ontario
was interested as a partner in a similar business carried on in Michi-
gan:—

Held, that the irresistible inference from the facts in evidence was, that
what was done by the one partner was done with the assent and ap-
proval of the other; and, therefore, the rule of law laid down by Lind-
ley, L.J., in Aas v. Benham, [1891] 2 Ch. 244, 255, “that if a partner
without the consent of his copartners carries on a business of the same
nature as, and competing with, that of the firm, he must account for
and pay over to the firm all profits made by him in that business,”
had no application.

Quaere, whether the Michigan business was a “competing” business, with-
in the meaning of the rule.

Held, also, that the finding of a Referee upon a reference for the taking of
the accounts of the partnership, after the death of one of the partners, .
that the sale of an oil mill owned by the firm to a brother-in-law of
the defendant (the surviving partner), was provident, and the price
realised was as much as the mill was worth, was well warranted by
the evidence.

Held, also, upon the evidence, affirming the finding of the Referee, that
the surviving partner was, in truth, the purchaser, and that his brother-
in-law was a mere trustee for him.

Held, however, in this reversing the conclusion of the Referee, that the
defendant was not liable to account for profits realised when the oil
mill was afterwards sold with the other assets of a company formed to
carry on an oil business, to which the mill was turned over; he was
liable to account for the real value of the property which he had
improperly purchased; but that was the extent of his liability; and
the finding that the property sold for its full value was conclusive.
Held, also, reversing the finding of the Referee, that the defendant was
not entitled to an allowance for his services in connection with the
liquidation of the partnership.

Section 40 of the Trustee Act, R.S.O. 1897, ch. 129, applies only to ex-
press trustees; and, semble, a surviving partner is not a trustee at
all.

An appeal by the defendant and a cross-appeal by the plain-
tiffs from the report of George Kappele, K.C., an Official Re-
feree, dated the 7th December, 1910, upon a reference for taking
the accounts of a partnership which formerly existed between
John Livingston and James Livingston. John Livingston died
in 1896; and this action was brought by his representatives
against James.

ONTARIO LAW REPORTS.

247

XXVI.

March 15 and 18. The appeal and cross-appeal were heard
by Middleton, J., in the Weekly Court at Toronto.

7. F. Hellmuth, K.C., and J. 77. Moss, K.C., for the de-
fendant.

Wallace Nesbitt, K.C., and H. S. Osier, K.C., for the plain-
tiffs.

April 16. Middleton, J. : — The facts are fully set forth in
the very elaborate and careful report of the learned Referee,
and I do not need to set them forth at length. Three distinct
matters were argued, and those require to be separately dealt
with.

In 1856, the late John Livingston and James Livingston
came to Canada — young men — without any capital, and through-
out their lives worked together as partners. From very small
beginnings their business prospered, until, at the death of John,
the elder brother, in 1896, their joint property amounted to
more than half a million dollars. During all this time, the
brothers appear to have had perfect confidence in each other,
and each seems to have accorded to the other the greatest
liberty in respect to the assets of the firm. There do not
appear to have been any of the restrictions that would usually
have existed in the case of a partnership. Each brother was
practically allowed to do as he pleased. If he wanted money,
he took it, and it was charged to him. There was no fixed capi-
tal. Each brother took what he needed, and what was left was
used for the purposes of the business.

In the course of time, new problems arose. Some members
of the family were taken into the business. Ultimately, when
McColl, a son-in-law of James, and Peter Livingston, a nephew,
in 1887 desired to be taken into the business, James came to the
conclusion that it was inadvisable to introduce into the concern
any more relatives, and he told these young men to endeavour to
establish a business for themselves in Michigan, and that he
would assist them. It appears that John was asked to join in
this, but declined. Finally an arrangement was come to between
the two young men and James, by which they formed a partner-
ship to operate at Yale, Michigan; and there is no doubt that
James was the financial backer of this business. He desired to

Middleton, J.

1912

Livingston

Livingston.

248

ONTARIO LAW REPORTS.

Middleton, J.

1912

Livingston

Livingston.

fvOL.

open a separate bank account for its financing; and, at the
suggestion of the local bank manager, he opened a special
account — “J. & J. Livingston Special.” This was for the pur-
pose of avoiding any discussion with the bank’s head office.

This business was carried on in Michigan for nine years
before John’s death, and from small beginnings grew to be a
very substantial affair. There was no secrecy in connection
with it. It had many dealings with the firm of J. & J. Living-
ston; and, when the United States tariff was changed so as to
make it unprofitable for certain branches to be carried on from
Canada, some business formerly done by the Canadian firm
appears to have been substantially transferred to the American
firm.

Annual statements were prepared by the accountant, and
were submitted to J ohn Livingston. In none of these statements
was the Michigan business treated as being an asset of the
Canadian firm. No objection whatever was ever taken by John;
in fact, from the beginning of the whole matter, each brother
seems to have been entirely content to abide by the actions of
the other.

After the death of John, those claiming under him appear to
have felt themselves aggrieved by the dilatoriness of James in
the winding-up of the partnership ; and in 1901 an action for
the dissolution of the partnership was brought. This action has
dragged on to the present time.

In 1902, by consent, a judgment for a dissolution was pro-
nounced, in the ordinary form, save for the reservation to J ames
of the right to make a claim to be remunerated for his services
in connection with the liquidation. When the accounts were
brought in under this judgment by the defendant, a surcharge
was filed, claiming, among other things, that this Yale business
was an asset of the firm.

The other members of the Yale firm were not before the
Court ; yet both the Master to whom the matter was originally
referred, and the learned Referee, have, in the absence of the
other members, assumed to deal with the question of ownership.
The learned Referee has found that the business is and
always was a separate business, and that it was not owned by
the partnership ; and no appeal has been had from this decision.

XXVI.]

ONTARIO LAW REPORTS.

249

The Referee has, however, found that the facts bring the case
within the rule of law laid down by Lindley, L.J., in Aas v.
Benham, [1891] 2 Ch. 244, 255: “It is clear law that every part-
ner must account to the firm for every benefit derived by him
without the consent of his co-partners from any transaction con-
cerning the partnership or from any use by him of the part-
nership property, name or business connection. . . . It is

equally clear that if a partner without the consent of his co-
partners carries on a business of the same nature as, and com-
peting with, that of the firm, he must account for and pay over
to the firm all profits made by him in that business.”

Upon that assumption, he has directed the defendant to bring
into the partnership accounts all the profits received by him from
the Yale business; and I understand this ruling to include not
merely the profits which have actually been divided, but profits
which have gone to increase the capital of that concern.

Upon the argument before me it was admitted that this was
too wide, and that James’s liability, if any, to account, must be
taken to have terminated upon the dissolution of the Canadian
firm by the death of his brother John.

With great respect for the learned Referee, and realising
the advantage he had in hearing some portion of the evidence,
I find myself unable to agree with him. I think the irresistible
inference from the facts is, that what was done by James was
done with the assent and approval of John ; and that, therefore,
the rule has no application.

The case in this aspect is singularly like Kelly v. Kelly
(1911), 20 Man. L.R. 579, decided since the learned Referee’s
report.

Had I not come to this conclusion, I would have hesitated
long before determining that this business was a competing busi-
ness within the rule in question. When the business was estab-
lished, the intention undoubtedly was to locate the young men
far from home, where the business would not compete. They
were to go to another country, and earn their own experience,
and to establish an independent business for themselves; James
became a partner in the Yale business for the purpose of re-
munerating him for his advice and counsel, and above all for his
financial assistance. None of the cases upon competing business

Middleton, J.

1912

Livingston

Livingston.

17 — XXVI. O.L.R.

250

ONTARIO LAW REPORTS.

Middleton, J.

1912

Livingston

Livingston.

[vol.

at all resemble this; and, when the relationship which existed
between the brothers is borne in mind, it seems, to me at least,
that the case is very far removed from the facts of the cases
which have given rise to the rule.

Upon the argument, the Wurth-Hairst business was men-
tioned as forming the subject of a separate ground of appeal.
This was not argued in detail, as I was told that my decision in
connection with the Yale business would govern it.

The second ground of appeal is in connection with an oil
mill owned by the firm. After the dissolution and after the
parties were at arms’ length and represented by separate solici-
tors, negotiations took place between James Livingston and the
representatives of John for the purchase of this mill. James
offered $45,000. This was at first accepted, but the acceptance
was withdrawn. The property was then offered for sale, and was
purchased by one Erbach, brother-in-law of James, .for $38,500.
This sale was attacked before the Referee as being a sale at an
undervaluation; but the Referee found, upon the evidence, that
the sale was provident, and the price realised was as much as the
mill was worth. This finding is well warranted by the evidence.
The valuation obtained on behalf of John’s representatives, of
something over $48,000, was accompanied by the statement
that no such price could be realised at a sale, but that it repre-
sented the actual value of the machinery as a running concern,
and that the value placed on the buildings could not be realised,
because, apart from the oil business — for which the buildings
were adapted — they had no utility.

This sale was further attacked upon the ground that James
Livingston was, in truth, himself the purchaser, and that
Erbach was a mere trustee for him; and the Referee has so
found. A company was incorporated shortly after the pur-
chase, and the property was turned over to it; and this com-
pany has, in its turn, sold to the Dominion Oil Company. The
whole transaction was financed upon James Livingston’s credit;
and neither the purchaser nor any of the shareholders of the
company had ever put any money into the concern. I do not
think it was open to the Referee to inquire into the title of the
purchasers, in their absence. The company, although the crea-
tion of James Livingston, and in one sense almost identical with

XXVI.]

ONTARIO LAW REPORTS.

251

him, was still a legal entity, and conld not be deprived of its
property in its absence; but James Livingston can be made to
account, upon a proper basis if he has been guilty of any wrong-
doing.

Upon the appeal before me it was argued that the Referee’s
finding of fact was not correct. No doubt, the finding is
opposed to the oath of all those concerned; but actions fre-
quently speak louder than words; and the conclusion appears
to me irresistible that Livingston was, in truth, the purchaser.

I was urged to find that the correct inference from the evi-
dence is, that Livingston was not the purchaser at the sale ; that
Erbach was not a trustee for him; but that, after the contract
had ceased to be executory, Livingston had purchased from
Erbach. The difficulty is, that there is no evidence to support
this contention, and that it is quite opposed to what is stated by
every one. It was suggested that to find otherwise would be to
impute some improper conduct or some ignorance of the law to
the late Mr. Barwick. It do not think it is necessary to do this.
I think it extremely unlikely that Mr. Barwick knew the facts.
Livingston, no doubt, was advised, and, no doubt, knew, that he
could not buy directly or indirectly; but, nevertheless, I think
that Erbach did buy for him; and everything that has taken
place subsequently is consistent only with this view.

But I cannot at all agree with the consequences the Referee
has attributed to this finding of fact. He says that the defend-
ant must account to the estate for what was received by the
James Livingston Linseed Oil Company when it went into the
oil merger and transferred its property to the Dominion Linseed
Oil Company.

I do not think that this is the result. Before the transaction
was attacked, Erbach had conveyed the property to the James
Livingston company. Its title has not been impeached. This
transfer was at the same purchase-price, and merely involved
the assumption of the liability to pay the $38,500 to the estate ;
so there was then no profit. Nevertheless, Livingston would be
liable to account for the real value of the property which he had
improperly purchased; but it has been found that the property
sold for its full value, and this finding has not been appealed
from; and I think this ends his liability.

Middleton, J.

1912

Livingston

Livingston.

252

ONTARIO LAW REPORTS.

Middleton, J,

1912

Livingston

Livingston.

[VOL.

The consequences of the Referee’s findings appear to be
most serious. The James Livingston Linseed Oil Company -car-
ried on business for years. The buildings and machinery formed
a very small part of its real assets. It was, as a going concern,
transferred — probably at a fictitious price — to the Dominion
company; and it would be an extraordinary thing if the result
should be that the estate should receive much more than the
buildings and machinery were worth, and much more than these
buildings and machinery cost or could be duplicated for. The
question involved somewhat resembles that discussed in Lindley
on Partnership, 7th ed., p. 634, concerning the liability of
partners who carry on a partnership business, after their dis-
solution, and the profits made arise, not so much from the part-
nership assets which are used, as from the skill, industry, and
ability of the surviving partners.

The question of the measure of damages of a trustee who
becomes himself a purchaser is dealt with in the Divisional
Court in the case of Atkinson v. Casserley (1910), 22 O.L.R. 527.

The third question is the propriety of the allowance made by
the Referee to the defendant for his services in connection with
the liquidation of the partnership. No doubt, the defendant
has rendered great services to the partnership ; and, as a matter
of fairness and equity, his services ought to be remunerated;
but I fear that the law is against his claim. In England it is well
settled, though I have been unable to find any case indicating
the precise ground upon which such a claim is disallowed. It
may be because of the nature of the partnership contract; or it
may be because in England trustees render their services gra-
tuitously, unless it is otherwise expressly provided in the trust-
deed. More probably there has never been any exact state-
ment of the reason for the rule, because no English lawyer
would think of placing the right of a surviving partner higher
than the right of a trustee.

I can find no trace of any such allowance having been made
in Ontario. The right, if it exists, must be based upon the
Trustee Act. For convenience I refer to the Act in the revision
of 1897, ch. 129, which in this respect is similar to the Act of
1887, which probably applies. The sections dealing with this
matter are 40 et seq. Section 40 provides that “any trustee

XXVI.]

ONTARIO LAW REPORTS.

253

under a deed, settlement or will ... or any other trustee,
howsoever the trust is created,” shall be entitled to an allow-
ance. These words, it seems to me, apply only to express
trustees; and this impression is strengthened by reference to
sec. 27, which provides that the expression “ trustee,” in the
next five sections of the Act, includes “a trustee whose trust
arises by construction or implication of law, as well as an express
trustee.” So, even if a surviving partner could be regarded as
a trustee, he would not he within the provision of the statute
relating to remuneration.

Besides this, there is authority for the statement that a sur-
viving partner is not a trustee at all: Knox v. Gye (1872), L.R.
5 H.L. 656. His position, no doubt, imposes certain obligations
and duties which are in their nature fiduciary; but it is not
every one who is subjected to these obligations and restraints
who can claim to be a trustee and entitled to all the privileges
of a trustee. A wider construction has been adopted in the
interpretation of the statutory provision corresponding with
sec. 27 : see In re Lands Allotment Co., [1894] 1 Ch. 616, at p.
632; but I am precluded from applying this reasoning to the
case in hand because of the view I entertain that sec. 40 applies
only to express trustees.

The result is, that both appeal and cross-appeal succeed to
the extent indicated; and, as success is divided, there should
be no costs.

Middleton, J.

1912

Livingston

Livingston.

18 — XXVI. O.L.R.

254

ONTARIO LAW REPORTS.

[VOL.

[MEREDITH, C.J.C.P.]

1912
April 17

It is ultra vires of a company incorporated under the Ontario Companies
Act, R.S.O. 1897, ch. 191, to issue shares at a discount; and held, that
the respondent, who had paid for five shares and was allotted by the
company seven and a half shares described as fully paid-up (the extra
shares being regarded as paid for by services rendered in promoting
the company), and had acquiesced and acted as a holder of seven and
a half shares, was not entitled, upon the ground of mistake, to be re-
lieved from his position as a shareholder in respect of the extra two
and a half shares; and a resolution of the shareholders, “that all stock
certificates which have been regarded in the light of bonus stock be
recalled into the company,” and what was done under it, namely, the
Cancellation of the respondent’s certificate for seven and a half shares
and the issue of a new certificate to him for five fully paid-up shares,
were ultra vires of the company; and the respondent was liable, upon
the winding-up of the company, as a contributory in respect of two un-
paid shares — not two and a half, because there is no warrant in the
Act to allot anything less than a share, and the respondent’s liability
did not extend to the half share.

Sections 10, 33, and 37 of the Ontario Companies Act, R.S.O. 1897, ch.
191, considered.

Review and application of cases under the English Companies Acts.

Ooregum Gold Mining Go. of India V. Roper, [1892] A.C. 125, specially re-
ferred to.

The mistake of the respondent was not a mistake of fact, but a mistake as
to the law.

Re Cornwall Furniture Co. (1910), 20 O.L.R. 520, followed.

Re McGill Chair Co.

Munro's Case.

Company — Winding-up — Contributory — Shares Issued at a Discount as fully
Paid-up — Ultra Vires — Liability of Allottee — Mistake of Law — Repu-
diation — Cancellation of Allotment — Resolution of Shareholders —
Ultra Vires — Ontario Companies Act , R.S.O. 1897, ch. 191, secs. 10,
33, 37 — Allottee Treated as Shareholder — Knowledge and Acquies-
ence — Allotment of Half Share — Liability.

An appeal by the liquidator of the company from an order
of the Local Master at Cornwall, dated the 12th 'September,
1911, refusing to settle the name of Munro, the respondent, on
the list of contributories in respect of two shares and one half-
share of the capital stock of the company, upon a reference for
winding-up under the Dominion Winding-up Act.

November 20, 1911. The appeal was heard by Meredith,
C.J.C.P., in the Weekly Court at Toronto.

George 'Wilkie, for the liquidator.

J. A. Macintosh, for the respondent.

April 17, 1912. Meredith, C.J. : — The facts, as far as
they are material to the question for decision, are undisputed,

XXVI.] ONTARIO LAW REPORTS.

and are: that the respondent was asked by McGill, a director
of the company, to subscribe for shares, and was promised seven
and a half fully paid-up shares of $100 each, for $500; and he
was advised by Pitts, another director, to do so. The respondent
agreed to take the shares on these terms, and accordingly sub-
scribed for them and paid the $500, receiving on the 16th Janu-
ary, 1907, a stock certificate describing the shares as fully paid-
up.

This transaction was not an isolated one; for, as I under-
stand, all the shares issued by the company were subscribed for
and allotted on the same terms.

All parties acted in good faith and under the belief that
the transaction was one into which the company might lawfully
enter.

A resolution of the directors had been passed on the 31st
October, 1906, “that services in connection with the promotion
and organisation of the McGill Chair Company be paid for in
fully paid-up shares of the stock of the company, and that certi-
ficates be issued for the same.”

Instead of allotting bonus shares to the persons who had
rendered the services mentioned in the resolution, the plan was
adopted of giving to each person who subscribed for shares
three shares for every two for which he paid, or at that rate;
the additional fifty per cent, being provided by the shares the
issue of which was authorised by the resolution.

Although this was the plan adopted, Munro was treated in
the books of the company as having subscribed for five shares,
and paid for them with the $500, and as holding two and a
half shares paid for by “services rendered in connection with
promoting this company.”

The respondent, on the 24th April, 1908, gave a proxy to Mr.
Campbell to vote for him at a shareholders’ meeting to be held
on the 27th of that month, and in it he described himself as the
holder of seven and a half shares; and the respondent himself
attended two of such meetings.

In January, 1910, the company, as the learned Master puts
it, was in deep water financially.

Some of the shareholders, to whom shares had been allotted

255

Meredith, C..T.

1912

McGill
Chair Co.
Munro’s
Case.

256

ONTARIO LAW REPORTS.

[VOL.

Meredith, C.J.

1912

McGill
Chair Co.
Munro’s
Case.

on similar terms to those on which the respondent’s shares were
allotted to him, had, about a year before this, learned of the
illegality of the transaction, and demanded that the certificates
which had been issued to them should be cancelled and new
certificates issued for the shares for which they had fully paid
in cash. These demands and occasional threats of legal pro-
ceedings to enforce them continued during the year preceding
the passing of the resolution to which I shall next refer.

On the 14th January, 1910, at a meeting of the shareholders
it was resolved : ‘ ‘ That all stock certificates which have been re-
garded in the light of bonus stock be recalled into the company,
and whereas Thomas McGill performed special services in con-
nection with the promotion of the company is desirous of
retaining his stock that he may be exempt from the above
resolution. ’ 9

The respondent made no separate demand to have his bonus
shares cancelled, but he was present at this meeting and voted
in favour of the resolution.

In pursuance of this resolution, the stock certificates, except
McGill’s, were called in and cancelled, and on the 22nd Janu-
ary, 1910, a new certificate was issued to the respondent for
five fully paid-up shares.

In the view of the Master, the respondent, in accepting the
seven and a half shares, acted under a mistake of fact; and,
having repudiated the bonus shares, as the Master found, as soon
as he became aware of. the mistake, he was entitled to have the
allotment of them cancelled, as was done.

The mistake under which, as the Master thought, the re-
spondent acted was in believing that the seven and a half shares
were, as they were represented to be, fully paid-up.

I am unable to agree with this view. The mistake of the
respondent was not, in my opinion, a mistake of fact, but a
mistake as to the law.

It is not like the case of Burkinshaw v. Nicolls (1878), 3 App.
Cas. 1004, where the company was held to be estopped from
alleging that the shares were not fully paid-up, by the certificate
which it had issued, and on the faith of which a third person
had purchased the shares from the person described in the certi-

XXVI.]

ONTARIO LAW REPORTS.

257

ficate as being the owner of them, stating that they were fully
paid-up.

The respondent dealt directly with the company, and knew
that he was purchasing from it shares that had not been issued
to any one else, but were being issued then for the first time;
and the mistake under which he laboured was the belief that the
company had a right to issue shares to him at a discount of one-
third of their face value, for that was the effect of the trans-
action.

The position of the respondent is well described by what was
said by Bowen, L.J., in Ex p. Sandy s (1889), 42 Ch. D. 98, 117.
The defendant in that case sought to have the register rectified
by striking out her name in respect of six hundred and seventy-
three shares issued at a discount, and the money she had paid
in respect of them repaid to her. ‘ ‘ The question, ’ ’ said the Lord
Justice, “is, whether the respondent, whose name is upon the
register, has agreed to become a member. The original contract
under which she applied for shares was not one that, as long as
it rested in fieri , could have been enforced. She applied for
shares to be given to her coupled with a condition which the law
would not recognise, and the company had no right, disregard-
ing the condition, to force upon her something which she had
not asked for. If the case stood there, there would have been
an end of the matter. The original contract was not one which
could have been enforced, and in giving her the shares without
attaching the condition to them, which she made a portion of
her offer, the company were not giving her what she asked for.
But the matter does not rest there, and this is just the point
of the case. After her name was placed on the register and
after she knew that her name was on the register, she did cer-
tain acts which were only consistent with an intention on her
part to be treated as a member of the company, and to treat
herself as a member of the company in respect of these particu-
lar shares which had been so appropriated to her. If that is not
evidence of an agreement to be a member, I really do not know
what is.” Lindley, L.J., in the same case (p. 115), says: “There
never has been from the beginning to the end any mistake on
her part about the facts. Such a mistake as there has been was
a mistake by her, if any, as to the legal effect of what she has

Meredith, C.J.

1912

McGill
Chair Co.
Munro’s
Case.

258

ONTARIO LAW REPORTS.

Meredith, C.J.

1912

McGill
Chair Co.
Munro’s
Case.

[VOL.

done. She has not taken these shares on the theory or supposi-
tion that they were in fact paid-np to the full extent of £5.
She knew all the time that they were not paid-np, and were
never intended to be paid-np. No doubt she thought, not know-
ing the law, that she never would have to pay the- balance. . .
Now the moment she gets these shares and finds she is on the
register, what does she do? Does she repudiate? Assume she
might, but does she? Quite the reverse; being still in ignor-
ance, as she says, of hex rights — not in ignorance of any material
fact, but being still in ignorance, or under an erroneous impres-
sion as to the legal effect of what she is about — she treats her-
self as a shareholder in respect of these shares.” And Cotton,
L.J., points out (p. 113) that there was in the case what was
wanting in In re Almada and Tirito Co. (1888), 38 Ch. D. 415,
namely, the assent of the shareholder to her name being on the
register in respect of the shares; and he distinguished Beck’s
Case (1874), L.R. 9 Ch. 392, saying that “the mistake on which
the applicant was there relying was not a mistake in law, but a
mistake in fact;” and, after a reference to the facts of that
case, he added: “If there had been a mistake of the general
law of the country, he could not have been relieved. But what
the Lords Justices held was, that he was entitled to have his
name struck off the register because he had been put on under
a contract entered by him under a mistake in fact, of which he
was entitled to have the benefit.”

In Welton v. Saffery, [1897] A.C. 299, the shares had been
issued at a discount, and it was held that the holders of them
were not released from liability in a winding-up to calls for the
amount unpaid on their shares, for the adjustment of the rights
of the contributories inter se, as well as for the payment of the
company’s debts and the costs of winding-up. Speaking of the
nature of the transaction, Lord Macnaghten said (pp. 321-2) :
“The truth is, as it seems to me, that there never was a contract
between the company or the shareholders, on the one hand, and
the persons to whom these discount share were offered, on the
other. There was an offer by the directors purporting to act on
behalf of the company, but it was an offer of that which the
company could not give, because the law does not allow it.
There was an acceptance by the discount shareholders of that

XXVI.

ONTARIO LAW REPORTS.

259

offer. But that offer and acceptance could not constitute a
contract. Both parties acted under a misconception of law, and
the whole thing was void. The company, however, placed the
names of the discount shareholders on the register ; they allowed
their names to remain there until their remedy against the com-
pany was gone; and now they cannot be heard to say that they
were not shareholders.”

Ex p. Sandy s was followed by Britton, J., in Be Cormvall
Furniture Co. (1910), 20 O.L.R. 520, and his decision was
affirmed by the Court of Appeal. The question in that case
was as to the position of persons to whom bonus shares had been
isued; and, dealing with it, the Chief Justice of Ontario said
(p. 533) : “It is now too late for these persons to ask to be re-
lieved from their position as holders of the shares which they
thus acquired. No doubt, they acted under a mistaken belief,
but that fact does not suffice to entitle them to be relieved.
Having assented to the allocation of the shares and accepted the
position of holders in respect of them, they cannot be relieved
from the liability attached to the position simply because they
made a mistake in the general law. There is no question that
the facts were fully known to them.”

In the Cornwall case, the question arose after an order for a
winding-up of the company had been made ; and I refer to it
only for the purpose of shewing that a mistake such as that
under which the respondent laboured is a mistake as to the law,
and not a mistake as to facts.

In the English cases it will have been noticed that the
assent of the shareholder to his name appearing on the register
of shareholders is spoken of as the determining factor for
fixing him with liability as a shareholder; and in the case at
bar there is nothing to shew that the respondent knew that his
name had been entered in the register as the holder of the seven
and a half shares. That circumstance is not, in my opinion,
material, as the real determining factor is his knowledge that
the company treated him as a shareholder and his acquiescence
in being so treated, and that I take to have been the opinion
of the Chief Justice of Ontario, judging from his observations in
the Cormvall case which I have quoted — “Having assented to

Meredith, C.J.

1912

McGill
Chair Co..
Munro’s.
Case.

260

Meredith, C.J.

1912

McGill
Chair Co,
Mtjnro’s
Case.

ONTARIO LAW REPORTS. [vol.

the allocation of the shares and accepted the position of holders
in respect of them, they cannot be relieved. . . ”

The Act nnder which the company was incorporated, the
Ontario Companies Act, R.S.O. 1897, ch. 191, contains no pro-
vision similar to sec. 25 of the English Companies Act of 1867,
which provides that every share “ shall be deemed and taken
to have been issued and to be held subject to the payment of
the whole amount thereof in cash, unless the same shall have
been otherwise determined by contract duly made in writing,
and filed with the Registrar of Joint Stock Companies at or
before the issue of such shares.”

It is clear, however, from Ooregum Gold Mining Co. of
India v. Roper, [1892] A.C. 125, that, apart altogether from the
provisions of sec. 25, the issue of shares at a discount is ultra
vires a company whose capital is divided into shares of a fixed
amount, and the liability of the shareholders of which is limited
to the amount unpaid on their shares. See the observations of
the Lord Chancellor (p. 134), Lord Watson (pp. 135-6), Lord
Macnaghten (p. 145), and Lord Morris (p. 148). See also
Welt on v. Saffery, supra.

There is, in my opinion, no reason why these and similar
cases should not be applicable to companies incorporated under
the law of Ontario.

The Ontario Companies Act, R.S.O. 1897, ch. 191, requires
that the number of the shares and the amount of each share
shall be stated in the application for incorporation (sec. 10) ;
and sec. 33 provides that “not less than ten per centum upon
the allotted shares of stock of the company shall, by means of
one or more calls formally made, be called in and made payable
within one year from the incorporation of the company; the
residue when and as the by-laws of the company direct;” and,
although there is no express provision limiting the liability of
shareholders to the amount unpaid on their shares, sec. 37, im-
pliedly at all events, so limits it; and the constitution of a
company incorporated under that Act possesses, therefore, both
of the features which led to the conclusion that it was idtra
vires of a company incorporated under the English Act of 1867
to issue shares at a discount; and in the reported cases in this
Province the English decisions have been applied, uotwith-

XXVI.]

ONTARIO LAW REPORTS.

261

standing the absence of any provision in onr Companies Acts
similar to sec. 25 of the English Companies Act.

For these reasons, I am of opinion that the respondent was
not entitled, npon the ground of mistake, to be relieved from his
position of shareholder in respect of the two and half shares;
and it follows, I think, that the resolution of the 14th January,
1910, and what was done under it, was ultra vires the company.

In the Ooregum case the Lord Chancellor (at p. 133) said:
“It seems to me that the system thus” (i.e., by the Companies
Act) “created by which the shareholder’s liability is to be
limited by the amount unpaid upon his shares, renders it impos-
sible for the company to depart from that requirement, and
by any expedient to arrange with their shareholders that they
shall not be liable for the amount unpaid on the shares, although
the amount of those shares has been, in accordance with the Act
of Parliament, fixed at a certain sum of money. It is manifest
that if the company could do so the provision in question would
operate nothing. I observe in the argument it has been sought
to draw a distinction between the nominal capital and the capital
which is assumed to be the real capital. I can find no auth-
ority for such a distinction. The capital is fixed and certain,
and every creditor of the company is entitled to look to that
capital as his security.”

In Bellerby v. Roivland & Marwood’s Steamship Co., [1902]
2 Ch. 14, the Master of the Rolls, quoting this passage from
the speech of the Lord Chancellor, added (p. 26) : “And the
opinions of the other learned Lords are to the same effect. The
justification of forfeitures rests upon the statute itself, and I
think that since- Trevor v. Whitworth (1887), 12 App. Cas. 409,
no authority can be relied on as justifying a surrender having
the effect of reducing capital which cannot be supported as a
form of forfeiture.” Stirling, L.J., in the same case (p. 29),
expressed the opinion that ‘ 1 the weight of authority is in favour
of the view that forfeiture, which is specifically mentioned in
the Act of 1862, stands on a special footing, and that surrenders
can only be supported in circumstances which would justify
forfeiture.” Cozens-Hardy, L.J. (p. 31), dealing with the same
question, says: “When, however, the transaction involves, as in

Meredith, C.J.

1912

McGill
Chair Co.
Munro’s
Case.

262

ONTARIO LAW REPORTS.

Meredith, C.J.

1912

McGill
Chair Co.
Munro’s
Case.

[VOL.

the present case, the release by the company to the shareholder
of uncalled capital on their shares it seems to me that it is,
within Trevor v. Whitworth, a reduction of capital not sanc-
tioned by law. The decision of the House of Lords in the
Ooregum case, that shares in a limited company cannot be
issued at a discount, involves the principle, that the company
cannot be any device relieve a shareholder from the liability
to pay the full amount due on his shares. This would be the
result, if the shares had been retained by the plaintiffs, instead
of being surrendered to the company. But the fact that in
consideration of the release the shares were surrendered seems
to me to render the transaction no better. Uncalled capital is
part of the assets of the company. . . . The company, there-
fore, parted with £415, a portion of its assets, in consideration
of the acquisition of the shares. This was a purchase of the
shares, and is directly within the authority of Trevor v. Whit-
worth

I do not understand how half a share came to be allotted. I
find no warrant in the Act to allot anything less than a share,
and I do not think that the liability which, I hold, attached to
the respondent, extends to the half share which the company
assumed to allot to him. This point was not taken on the
argument, and counsel may speak to it if the appellant con-
tends otherwise ; and, subject to this, an order will issue allowing
the appeal and substituting for the order of the Local Master
an order that the name of the respondent be put upon the list
of contributories in respect of two shares.

There will be no costs of the appeal or of the application to
the Local Master.

Since writing the foregoing, my attention has been called to
a recent decision of my brother Middleton, Re Matthew Guy
Carriage and Automobile Co., Thomas’s Case (1912), 3 O.W.N.
902, which, it is said, is opposed to the view I have expressed as
to the effect of the resolution to cancel the shares and the
action taken upon it. I find, however, on inquiry from my
learned brother, that it is not, and that in that case the contract
to take the shares was still executory at the time the resolution
to cancel the bonus shares was passed.

[Leave to appeal to the Court of Appeal from the above decision was
granted by Middleton, J., on the 27th May, 1912 : see 3 O.W.N. 1326.]

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[IN CHAMBERS.]

Rex ex rel. Morton v. Roberts.
Rex ex rel. Morton v. Rymal.

1912

April 16

Municipal Elections — Township Councillor and Deputy Reeve — Qualifica-
tion — Transfers of Qualifying Properties after Election — Right to
Hold Seats — Qualification as Mortgagees — Defect in Declarations — -
Right to Make Fresh Declarations — Consolidated Municipal Act, 1903,
secs. 76, .219, 220, 311 — Procedure in Attacking Right to Hold Seats —
Notice of Motion in Nature of Quo Warranto — Time — Amendment.

The respondents were declared elected councillor and deputy reeve respect-
ively of a township. Both had been assessed as freeholders, and were
admittedly qualified at the time of the election. The councillor elect
made an absolute conveyance of his qualifying property, delivered and
registered before the 8th January, on which day he made a declaration
of qualification purporting to be in pursuance of sec. 311 of the Con-
solidated Municipal Act, 1903, and took his seat as councillor. The
declaration omitted the word “and” between the words “have” and
“had” in the third line of the form in the statute, sec. 311 — thus reading
“I hame had to my own use and benefit ... at the time of my
election . . . such an estate as does qualify me,” etc. The deputy
reeve elect also disposed of his only qualifying property; but this oc-
curred after he made the declaration and took his seat. The declar-
ation was in the same defective form. The councillor elect took as
part of the purchase-money of his property a mortgage thereon for
$4,100, and the deputy reeve elect took a mortgage in the same way for
$4,500: —

Held, that the statute lays down three prerequisites to a de jure occupa-
tion of the office: (1) possession of property qualification; (2) election
by acclamation or otherwise; (3) making the declaration prescribed;
and absence of any one of these will prevent the seat being filled de
jure.

And held, that the declarations made by the respondents were not in the
form nor to .the same effect as the form prescribed by the statute; and
neither respondent was de jure a member of the council.

Held , also, that the relator had the right to proceed by notice of motion
in the nature of a quo warranto, under secs. :219 and 220 of the Muni-
cipal Act, 1903, to attack the right of the respondents to hold their
seats.

Held, also, that, as the facts in regard to the transfers of the properties
and the form of the declaration came to the knowledge of the relator
only within six weeks of the application, he was in time under the
amendment made to sec. 220 of the Act of 1903, by 7 Edw. VII. ch.
40, sec. 5.

Held, also, that the notices of motion should be amended by setting up
the omission to make the statutory declaration.

Held, also, that, if the respondents could now make the declaration re-
quired by sec. 311 of the Act,- they should be allowed to do so, and so
make their occupancy of the offices de jure.

Regina ex rel. Clancy V. Conway (1881), 46 U.C.R. 85, followed.

Held, also, that the respondents, as mortgagees holding the legal estate in
the lands which they had conveyed, although not mortgagees in posses-
sion, had the qualification required by sec. 76 of the Consolidated Muni-
cipal Act, 1903 — there is nothing in principle or authority to prevent
a mortgagee who is assessed for the property qualifying on his legal
estate.

History of the legislation and review of the authorities.

264

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[VOL.

Riddell, J.

1912

Rex

EX REL.

Morton

Roberts.

Appeals by the respondents from orders of the Junior Judge
of the County Court of the County of Wentworth declaring that
the respondents had lost the right to hold their seats as coun-
cillor and deputy reeve respectively for the township of Barton,
having become disqualified since their election to those offices.

April 9. The appeals were heard by Riddell, J., in
Chambers.

J. G. Farmer, K.C., for the respondent Roberts.

A. M. Lewis, for the respondent Rymal.

W. A. H. Duff, K.C., for the relator.

April 16. Riddell, J. • — At the recent municipal election in the
township of Barton, such a number of nominations were made as
would apparently necessitate a taking of votes ; but at the pro-
per time, a sufficient number resigned (Consolidated Muni-
cipal Act, 1903, sec. 129 (2), (3)) to enable the clerk (sec. 129
(4)) to declare the remaining candidates duly elected. Accord-
ingly, Roberts was declared elected councillor and Rymal deputy
reeve.

Roberts had been assessed as freeholder on a certain lot, and
was admittedly “ qualified” at the time of the election. He,
however, by deed dated the 5th January, registered on the 6th
January, conveyed the land by deed absolute to one McDonald,
having on the 1st January taken a mortgage for $4,100. Not-
withstanding this transfer, he made a declaration of qualifica-
tion purporting to be in pursuance of sec. 311 of the Act and
amending statutes, on the 8th January, and upon that day took
his seat as councillor, and still continues to hold it.

The declaration omitted the word “and” between the words
“have” and “had” in the third line of the form in the statute,
sec. 311.*

Upon motion before His Honour Judge Monck, that learned
Judge made an order declaring “that the said Walter Roberts
hath lost his right to hold his seat as a councillor of the township
of Barton, and hath become disqualified since his election to hold
his said seat, he having since his said election sold and disposed
of the property on which he qualified, and not being otherwise

* “. . . have and had to my own use and benefit ... at the time of
my election to the office . . . such an estate as does qualify me to act

in the office ”

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265

qualified or possessing the necessary qualification required by
the Consolidated Municipal Act, 1903, and amendments thereto,
and said seat is vacant. ’ ’

Rymal had also been assessed for certain property, and ad-
mitted was duly ‘ 4 qualified ’ ’ at the time of the election ; hut he
also conveyed his property by deed of date the 28th December,
affidavit of execution the 6th January, registered the 23rd Janu-
ary, on which day the transaction was completed by Rymal
taking a mortgage for $4,500 for part of the purchase-money
and handing over the deed.

The learned Judge says of this transaction : “ Rymal also dis-
posed of his only qualifying property, but this occurred after
he took the oath of qualification and after he took his seat.”
Rymal made, on the 8th January, a declaration in the
same defective form as that made by Roberts, and took his seat
as deputy reeve, and still claims it. A motion before Judge
Monck resulted in a similar order — each respondent was ordered
to pay costs.

Both Roberts and Rymal now appeal.

The learned Judge proceeded on the ground that the pro-
perty qualification of a member of a municipal council was a
continuing qualification; and that, once the property qualifica-
tion originally necessary was lost, the incumbent of the office
became ipso facto disqualified.

In the view I take of the case, I do not think I need pass
upon that question. It is, however, to be observed that from
almost the very earliest times the qualification has been express-
ed to be that entitling a person “to be elected.”

The first general Act (1838), 1 Viet. ch. 21, providing for
the election of certain officers — clerk, assessor, collector, etc.— has
no qualification for the officer to be elected, although it has for
the voter (secs. 2, 4).

The Municipal Act of 1841, 4 & 5 Viet. eh. 10, sec. 11, pro-
vides that “every person to be elected a member of a District
Council . . . shall be seized and possessed,” etc., etc.

Baldwin’s Act, 12 Viet. ch. 81, secs. 22, 57, 65, 83, contains
the same language; the Act of 1858, 22 Viet. (stat. 1) ch. 99,
which is the same as (1859) C.S.U.C. ch. 54, sec. 70, also; and the

Riddell, J.

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EX EEL.

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Roberts.

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[VOL.

terminology appears in the various amendments and re-enact-
ment down to the present Act of 1903, sec. 76. Sometimes,
indeed, the provision is negative, as at present, and sometimes
positive, as was the original form — but, whether it be ‘‘no per-
son but,” or “every person who,” it is always “to be elected.”

Language quite different was used almost from the first in
respect of certain cases. It is true that in the Act 4 & 5 Viet,
ch. 10 it was provided (sec. 12) that “no person ... in Holy
Orders or . . . Minister ... of any religious sect . .

nor any Judge . . shall be qualified to be elected a councillor

. . ;” but the language was soon changed. In the Act of
1849, by sec. 132, it was enacted “that no Judge . . . and no
person having . . . any interest ... in any contract with
. . . the Township . . . shall be qualified to be or be elected
. . . councillor . . .” And in Baldwin’s Act, C.S.U.C.

ch. 54, sec. 73, it is provided that such person shall not be
qualified “to be a member of the Council of the Corporation.”
The same language continues down to the present Act, sec. 80

And, in like manner, the Act of 1849, sec. 112, provides
that, if any member of a municipal council ‘ ‘ be declared a bank-
rupt ... or shall compound by deed with his creditors, then
. . . such person shall . . . immediately become disquali-

fied, and shall cease to he a member of such municipal corpora-
tion . . and the vacancy thereby created . . . filled as in
the case of the natural death of such member . . .” In the

C.S.U.C. ch. 54, sec. 121, the occasions for the seat becoming
vacant are increased in number, introducing amongst others ‘ ‘ as-
signs his property for the benefit of creditors” — and so it has
continued to the present time (Consolidated Municipal Act,
1903, sec. 207), appearing in substantially the same words in the
nine or ten re-enactments and amendments.

The difference in the terminology affords a very cogent argu-
ment against the view that the Legislature intended the sale
of the qualifying property to operate as an act ipso facto dis-
qualifying the member, at all events after proper declaration
of qualification made — had that been the intention, it is difficult
to see why the provision that an assignment for the benefit of

XXVI.]

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his creditors is made specifically a ground of disqualification,
without the addition “a sale or assignment of qualifying pro-
perty. ’ ’

So in the Act of 12 Viet. ch. 81, sec. 110, it is provided that
the absence of the head of the council “vacates” the seat.

On the other hand, a consideration of the form of the oath or
declaration affords a strong argument that the ownership of the
property qualification must continue — at all events until the oath
or declaration was made. And this will appear during the
consideration of the forms laid down, which I shall speak of in
another point of view. For I do not intend to decide these cases
upon the ground taken by the County Court Judge.

From a very early period it has been a statutory require-
ment that a councillor, etc., should make a declaration (or take
an oath). The Act of 1838 provides for a promissory oath, and
it was to be made (secs. 9, 36) within twenty days of being noti-
fied of election, upon penalty of a fine of £5. But the Act of
1841 contained a provision “that no person elected a councillor
. . . shall be capable of acting as such until he shall have taken
and subscribed” the statutory oath — and he was given (sec. 16)
ten days after notice of his election to take this oath, otherwise
he was deemed to have refused the office, and was liable to a fine
— his office was deemed vacant and a new election had. The oath
is not only promissory (sec. 15), but also “that I am seized and
possessed, to my own use, of lands,” etc., and that such “lands
are within the District of . . . and are of the real value of

£300,” etc., etc. The Baldwin Act, 12 Viet. ch. 81, provides (sec.
129), “that every person who shall be elected ... to any
office which requires a qualification of property . . . shall,

before he shall enter into the duties of his office, take and sub-
scribe an oath or affirmation to the effect following, fhat is to
say: ‘I, A. B., do swear . . . that I am truly and bond fide

seized to my own use and benefit of such an estate (specifying it)
as doth qualify me to act in the office of (naming it) . . .

according to the true intent and meaning of a certain Act of
Parliament,’ ” etc., etc.. Note that in these earliest qualifi-
cation oaths the present tense is used in speaking of the owner-

Riddell, J.

1912

Rex

EX EEL.

Morton

Roberts.

268

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ex REL.
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Roberts.

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ship, and also (in 12 Yict.) that the ownership of the estate doth
qualify to act in the office.

The language in 22 Yict. (stat. 1) ch. 99, sec. 175, is, “before
he . . . enters on his duties . . ;” and the declaration (a

solemn declaration now being substituted for an oath) is still,
“lam truly and loud fide seized . . . doth qualify me to act
in the office,” etc.

The statute 29 & 30 Yict. ch. 51, sec. 178, makes no change
from the language of the Consolidated Statute — the Act of 1873,
36 Yict. ch. 48, sec. 211, brings in the form still in use — “have
and had to my own use and benefit ... as proprietor . . .
at the time of my election to the office of . . . does qualify
me to act . . . ” — precisely the same as the form in the
statute of 1903, sec. 311 (the word “proprietor” being used in-
stead of “owner”), but without the addition made by (1906) 6
Edw. VII. ch. 34, sec. 10.

The statute, in my view, lays down three prerequisites to a
de jure occupation of the office (I do not pause to inquire as
to others) : (1) possession of property qualification; (2) election
by acclamation or otherwise; (3) making the declaration pre-
scribed. Absence of any one of these will prevent the seat being
filled de jure — absence of one or all will not, of course, prevent
it being filled de facto.

“Where the statute requires a prescribed oath of office before
any person elected 1 shall act therein / a person cannot- justify
as such officer unless he has taken an oath in substantial, not
necessarily literal, compliance with the law:” Dillon on Muni-
cipal Corporations, 5th ed., sec. 395, and American cases cited
in note 1, at bottom of p. 680.

In The King v. Swyer (1830), 10 B. & C. 486, the capital
burgesses and common council of Shafton were authorised to
elect one of the burgesses each year to be mayor. The charter
provided that “he who . . . shall be elected . . . mayor

. . . before he be admitted to execute that office, or in any

way to intermeddle in "the same office, shall . . . take . . .
all the oaths by the laws . . . appointed . . . and that
after such oath so taken, he can and may execute the office of
. . . mayor . . .” Lord Tenterden, C.J. (p. 491) : “A party

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becomes mayor not merely by reason of his being elected, but
of being sworn into office.” Bayley, J. (pp. 491, 492) : “By the
clause authorising the election of a mayor, the capital burgesses
are to elect and nominate one of the burgesses to be mayor : and
he, before he executes his office, is to be sworn in. He becomes
the head of the corporation not when he is elected and nomin-
ated, but when he is sworn in.” It will be seen that no point is
made of the clause in the charter that ‘ ‘ after s*uch oath so taken,
he can and may execute the office of . . . mayor,” which is

the only point of differentiation between the Shafton charter
and our statute in that regard.

In The King v. Mayor, etc., of Winchester (1837), 7 A. & E.
215, the language of the statutes (9 Geo. IV. ch. 17, secs. 2, 4, and
5, and 5 & 6 Wm. IV. ch. 76, sec. 50) is a little different, but not
substantially so — and Lord Denman, C.J. (p. 221), clearly shews
that it is the making of the declaration that constitutes the
acceptance of the office. See also per Littledale, J., at p. 222.

In a case under our own statute, upon language identical
with that in the present statute, Cameron, J. (afterwards Sir
Matthew Cameron, C.J.), said: “I am of opinion that until a
person elected a member of a municipal corporation has made
the declaration of qualification prescribed by the 265th section
of ch. 174, RjS.O. 1877, he has no right to exercise or dis-
charge the functions pertaining to the office : ’ ’ Regina ex rel.
Clancy v. St. Jean (1881), 46 U.C.R. 77, at p. 81. On p. 81 the
learned- Judge continues: “I think there can be no doubt that
this declaration is an essential prerequisite to the discharge of
the duties of the office of alderman. ’ ’ In the case of Regina ex
rel. Clancy v. Conway (1881), 46 U.C.R. 85, at p. 86, the same
learned Judge gave (in a certain event, which will be considered
later) leave to file an information in the nature of a quo ivar-
ranto, “on the ground that without making the declaration of
qualification he (Conway) illegally exercises the franchises of
the office.”

Such cases as United States v. Bradley (1836), 10 Peters 343,
are quite different, as they determine only that an appointment
in the nomination of the President, upon confirmation by the
Senate of the United States, becomes an absolute appointment,

Riddell, J.

1912

Rex

ex REL.
Morton

Roberts.

19 — XXVI. O.L.R.

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EX REL.

Morton

Roberts.

[VOL.

vesting the office in the nominee upon appointment by the Presi-
dent and confirmation by the Senate, although the nominee has
not given the bond which a statute requires him to give for the
security of the Government. Compare. United States Bank v.
Dandridge (1827), 12 Wheat. 64.

It can scarcely be seriously argued that the declaration taken
is “to the effect” of the form in the statute. As we have seen,
the earliest form of declaration of qualification was in the oath
in sec. 129 of the Act of 12 Yict. : “I am truly and bond fide,”
etc.; and this continued until the Act of 1873. At that time it
seems to have been considered proper to make sure that the
declarant had been, at the time of the election, properly quali-
fied — 'and not simply was possessed of the property qualifica-
tion at the time of the declaration. It might happen that one
not really having the property qualification would offer himself
for election, and, if elected, buy property for his qualification.
But from the very first the present tense is found somewhere in
the oath — and it is wholly absurd to suggest or argue that declar-
ing. “I have had property,” etc., is to the same effect as declar-
ing, “I have and had property,” etc.

It must be held that neither respondent is de jure a member
of the council.

We have next to consider whether the present procedure is
open to the relator — and two strong cases at first sight seem ad-
verse; but I think the apparent difficulty will disappear when
the course of the legislation is examined. In Regina ex rel.
Grayson v. Bell (1865), 1 U.C.L.J. N.S. 130, it was alleged that
the candidate’s declaration was not proper, but that it set out
property of which in fact he was not the owner. Hagarty, J.
(afterwards Sir John Hagarty, C.J.O.), refused a writ of sum-
mons in the nature of a quo warranto .

So, also, in Regina ex rel.. Hoisted v. Ferris (1870), 6 U.'C.
L.J. N.S. 266, Mr. Dalton, C.C. & P., refused to unseat Perris,
on the ground alleged that the declaration made by him was
insufficient, saying: “Nothing can be made of this objection on
this application. Whatever might be the effect of the omission
to describe the nature of the estate on a quo warranto at common
law, it affords no ground for declaring, in this statutory pro-

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ceeding, that the election was not legal, or was not conducted
according to law, or that the person declared elected thereat
was not duly elected. ’ ’

The common law writ of quo warranto — sometimes called
quo jure — was used by the King to call upon any subject who
exercised office or a franchise, to shew by what authority the
office or franchise was enjoyed — it might also be used by the
King to call upon one who held land, to shew by what title or
warrant he held. The right to such a writ rested, of course, upon
the principles that the King has the sole power of bestowing
offices and franchises and he is lord paramount of all land within
the kingdom. The writ, which was an original writ out of
Chancery, fell into disuse early, probably in the times of Richard
II. (Coke, 2 Inst. 498, etc.), and an information in the nature of
a quo warranto took its place. This was much abused in Stewart
times, but has survived; and still may be put in action in a
proper case — it lies against persons who claim any office, fran-
chise, or privilege of a public nature, and not merely ministerial
and held at the will and pleasure of others : Darley v. The Queen
(1845), 12 Cl. & F. 520.

As it was held that at the common law the King alone
could have such an information against those usurping offices,
etc., in municipal corporations, the statute 9 Anne ch. 20 was
passed, providing for the issue of such informations at the in-
stance of private prosecutors in such cases — and this statute
became part of our law by the Provincial Act, 32 Geo. III. ch. 1.

Both in England and in Upper Canada, the practice in such
cases has been simplified : the statutory provisions are in cases
covered by the statutes now taken advantage of — but, if there be
any casus omissus, the information under the Statute of Anne
may be still appealed to. In our own Courts, the most recent
case I know of is Regina ex rel. Moore v. Nagle (1894), 24 O.R.
507. Askew v. Manning (1876), 38 U.C.R. 345, is another case.

By the Act of 12 Viet. ch. 81, sec. 146, it was provided “that
at the instance of any relator having an interest as a candidate
or voter in any election ... a writ of summons, in the nature
of a quo warranto, shall lie to try the validity of such election,
which writ shall issue out of His Majesty’s Court of Queen’s

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EX REL.

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Bench . . . upon such relator shewing upon affidavit . . .
reasonable grounds for supposing that such election was not
conducted according to law, or that the party elected or returned
thereat was not duly or legally elected or returned.’ ’ Thence-
forward, the writ of summons was used instead of the informa-
tion in the nature of a quo warranto in cases to which it was
applicable.

When the case Regina ex rel. Grayson v. Bell , 1 U.C.L.J. N.S.
130, was decided (in 1865), the statute in force was the C.S.U.C.
1859, ch. 54, which provided (sec. 128 (1)) that, “If . . . the
relator shews by affidavit to any such Judge, reasonable grounds
for supposing that the election was not legal or was not con-
ducted according to law, or that the person declared elected
thereat was not duly elected . . . the Judge shall direct a

writ of summons in the nature of a quo warranto to be issued to
try the matters contested.” The only matters which could be
thus contested were (sec. 127), “the right of any municipality to
a reeve or deputy reeve, or . . . the validity of the election or
appointment of a mayor, warden, reeve, deputy reeve, aider-
man, councilman, councillor or police trustee.” It is in view
of the provisions of the then existing statute that Hagarty, J.,
says: “As Bell was properly qualified, and nothing is alleged
against the manner of his election, I do not see how I can inter-
fere by quo warranto , because an apparent mistake” [the re-
port by a clerical error reads “no apparent mistake”] “has been
made in the description of the nature of an estate in pro-
perty. . . .”

In 1870, when Regina ex rel. Hoisted v. Ferris, 6 U.C.L.J.
N.S. 266, was decided, the Act in force was (1866) 29 & 30 Yict.
ch. 51 ; the provisions for a writ of summons in the nature of
a quo warranto, and the description of the matters that could be
tried under such a writ, are totidem verbis et Uteris the same as
in the C.S.U.C. : see 29 & 30 Yict. ch. 51, secs. 130, 131.

The statute 36 Yict. ch. 48, secs. 131, 132, was the same, and
also R.S.O. 1877, ch. 174, secs. 179, 180, which last contained the
statutory enactments when the two cases of Regina ex rel. Clancy
v. St. Jean and Regina ex rel. Clancy v. Conway, 46 U.C.R. 77,
85, came on. And it was due to the limited class of cases for the

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application of the statutory procedure that iu these cases an
information, and not a writ of summons in the nature of a quo
warranto, was applied for.

In 1892, by sec. 188 of the statute 55 Yict. ch. 42, a notice of
motion in the nature of a quo warranto was substituted for a
writ of summons : and this practice has continued to the present
time; the statute 60 Yict. ch. 15, schedule C (44), struck out in
the beginning all reference to the right of a municipality to a
reeve or deputy reeve; and 3 Edw. YII. ch. 18, sec. 32, made
a most important change: “In case the validity of the election
or the appointment or the right to hold the seat of a mayor,
warden, reeve, alderman, county councillor or councillor is
contested,” etc. etc. Before that time it was only the validity
of the election which could be challenged in the statutory method
—thereafter the right to hold a seat could be attacked in the
same way. Section 33 made a corresponding change in the
material to be presented to the Judge upon application in the
first instance. The consolidation of 1903, 3 Edw. YII. ch. 19,
sec. 219, followed, and that Act has been slightly amended by 6
Edw. YII. ch. 35, sec. 26, and 9 Edw. YII. ch. 73, sec. 5 (1).

The scope of the statutory remedy being extended to cover
the case of a contest as to a deputy reeve’s and a councillor’s
right to sit, there can be no doubt that the practice followed
here is proper.

It would seem that the facts, as to the transfer of the pro-
perty, and I suppose the form of the declaration, came to the
knowledge of the relator only within six weeks of the applica-
tion ; and, consequently, he is in time under the amendment made
to sec. 220 of the Consolidated Municipal Act, 1903, by the stat-
ute of 1907, 7 Edw. YII. ch. 40, sec. 5.

The form of notice of motion is : “ Take notice that by leave
of His Honour Judge Monck, Junior Judge of the County Court
of the County of Wentworth, a motion will be made on behalf
of the above named John E. Morton, of the township of Barton,
in the county of Wentworth, dairyman, and an elector entitled
to vote at a municipal election in the said township of Barton,
before the presiding Judge in Chambers, at .the court house in
the city of Hamilton, on the 8th day after the day of service

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EX REL.
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v.

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of this notice on yon (excluding the day of service), at the hour
of eleven o’clock in the forenoon, or so soon thereafter as the
motion can be heard, for an order declaring that the said Frank
E. Rymal, the above-named defendant, hath lost his right to
hold his seat as deputy reeve of the township of Barton, and
has become disqualified since his election to hold his said seat,
he having since his said election sold and disposed of the pro-
perty on which he qualified, and not being otherwise qualified' or
possessing the necessary property qualification required by the
Consolidated Municipal Act, 1903, and amendments thereto.”

The statute provides (sec. 221 (2)) that “the relator shall,
in his notice of motion, . . . state specifically, under distinct

heads, all the grounds of objection to the validity of the
election complained against, and in favour of the validity of
the election of the relator, or other person or persons, where
the relator claims that he or they, or any of them, have been
duly elected, on the grounds of forfeiture or disqualification,
as the case may he.” This is from 3 Edw. VII. ch. 19, sec. 221,
and makes no reference to a case in which the validity of the
election is not complained of and no claim is made for the
election of some one else — as in the present case. Accordingly,
I think the notice of motion may he amended by setting up the
omission to make the statutory declaration. Section 226 does
not apply for the same reason — or, if it be considered that the
first part applies on the mutatis mutandis principle, so does the
second — and I think it eminently a case where “the Judge in
his discretion” should “entertain any substantial ground of
objection to” the right to hold the seat.

The mere fact that a proper declaration has not been made
does not in itself compel the Court to declare the seat vacant.
In Regina ex rel. Clancy v. Conway, 46 U.C.R. 85, Cameron,
J., gave leave to the defendant to make the same within ten
days, if he could; and he says in the other case, 46 U.C.R. at p.
82: “As the latter” ( i.e the person elected) “can at any time
put himself in a position to exercise the franchises of the office
by making a proper declaration, his omission to make the de-
claration would not render the office vacant.” This was a case
of an imperfect declaration.

XXVI.]

ONTARIO LAW REPORTS.

275

The form of the declaration contemplates that the declarant
shall have, at the time of making* the declaration, the qualifica-
tion : no Court would allow a person to make a declaration
which was false and so commit an indictable offence : Criminal
Code, sec. 175. And, of course, no one with any sense of self-
respect would desire to make a false declaration.

Prom very early times the refusal to make the declaration
was held equivalent to a refusal of the office, even if the party
was incapable of making it: Attorney -General v. Read (1678),
2 Mod. 299; Starr v. Mayor, etc., of Exeter (1683), 3 Lev. 116;
affirming S. C., 2 Show. 158; Rex v. Larwood (1693), Carthew
306.

If the elected can now make the declaration required by sec.
311, then, under Regina ex rel. Clancy v. Conway, ut supra ,
they should be allowed to do so, and so make their occupancy of
the offices de jure, as it is now de facto.

The position of a mortgagee is well understood : he has the
legal estate in the land, holding the legal estate and the land
as security for his debt. Is this legal estate sufficient?

The early statutes do not employ the terminology now in use.

In 1 Yict. eh. 21, there is no qualification prescribed : but in
4 & 5 Viet. eh. 10, sec. 11, one to be elected must “be seized and
possessed to his own use, in fee, of lands and tenements within
the district ... of the real value of £300 currency, over and
above all charges and incumbrances due and payable upon or
out of the same.” Under 12 Yict. eh. 81, sec. 22, no one could
be elected township councillor “who shall not have been entered
upon the . . . roll as assessed for ratable real property held

in his own right ... as proprietor or tenant, to the value
of £100 . . ;” and under sec. 57 no one could be elected a

village councillor “who shall not be possessed, to his own use, of
real estate held by him in fee or freehold, or for a term of
twenty-one years or upwards ... of the assessed value of'
£250 . . Section 65 contains language similar to that of
sec. 57 ; while sec. 83 provides for the qualification of an aider-
man — “seized, to his own use, of real estate held by him in fee
simple, or in freehold . . of the assessed value of £500 .

In 1858, 22 Yict. (stat. 1) ch. 99, sec. 70, a change was made —

Riddell, J.

1912

Rex

EX REL.

Morton

Roberts.

276

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Riddell, J.

1912

Rex

EX REL.

Morton

Roberts.

[VOL.

“have ... in their own right or in the right of their wives,
as proprietors or tenants, freehold or leasehold property rated
. . . to at least the value . . .”

By the last Act before Confederation, 29 & 30 Viet. ch. 51,
sec. 70, another change was made — “have ... in their own
right or in the right of their wives, as proprietors or tenants, a
legal or equitable freehold or leasehold, rated . . .” There

must have been some reason for introducing the expression
“legal or equitable.” *

In the consolidation of 1873, 36 Viet. ch. 48, sec. 71, another
change was made — “have ... in their own right, or in the
right of their wives, as proprietors or tenants, a legal or equit-
able freehold or leasehold, or partly legal and partly equitable,
rated . . .” This language is unaltered in R.S.O. 1877, ch.
174, sec. 70: 46 Viet. ch. 18, sec. 73; but 49 Viet. ch. 37, sec. 2,
changes it to “legal or equitable freehold or leasehold, or partly
freehold and partly leasehold, or partly legal and partly equit-
able;” and this reappears in 50 Viet. ch. 29, sec. 2, R.S.O. 1887,
ch. 184, sec. 73; 55 Viet. ch. 42, sec. 73. The revisers in 1897,
under the powers given by 60 Viet. ch. 3, sec. 3, changed the
wording into its present form; and the Legislature adopted it
as R.S.O. 1897, ch. 223, sec. 76; and now it appears as Consoli-
dated Municipal Act, 1903, 3 Edw. VII. ch. 19, sec. 76 — the
amendment, 6 Edw. VII. ch. 35, sec. 5, not affecting this part of
the section.

I think that the Legislature must have had in view the
difference between legal and equitable estates : and that the
language now employed, differing as it does from that formerly
used, must Le given full effect to.

What estate then had Rymal at the time of the election, and
what estate has he now ?

At the time of the election, it is plain that he had the legal
estate, and that such legal estate was then worth not only the
$4,500 for which the mortgage was subsequently taken, but also
the amount of cash paid by the mortgagor as well. At the pre-
sent time, it is equally plain that he has the legal estate in the
land — that, the mortgage being in fee, this is a freehold, a
‘ ‘ legal freehold. ’ ’ This could be mortgaged or sold at any time ;

XXVI.]

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277

and, while it is indeed in equity but a security for the debt, it is
a valuable security — and worth $4,500. At the time of taking
the imperfect declaration, there is no question that he could
have made the declaration in proper form (owning as he did the
whole estate, and the sale being still in fieri, and it not appear-
ing that there was any enforceable contract for sale). Whether
he can now make the declaration must be determined by the
very words of the declaration itself. Leaving out the (for this
inquiry) unimportant words, it reads thus: “I . . do solemnly
declare . . that I have and had to my own use and benefit . .
as owner at the time of my election such an estate as does qualify
me to act in the office of deputy reeve for . . . and that such
estate is (specifying it) and that such estate at the time of my
election was of the value of at least,” etc., etc. It is to be noted
that the value at the time of making the declaration is not re-
quired to be set out.

Riddell, J.

1912

Rex

EX REL.

Morton

Roberts.

At the time of the election he had a legal estate worth
$4,500 and more — no equitable estate had been carved out of it —
now he has the very same legal estate, but it is worth only $4,500,
for an equitable estate has been created cutting down the value.
I think that, employing the language of sec. 76, Rymal “has, as
owner, a legal freehold which is assessed in his own name on
the last revised assessment roll of the municipality to at least
the value of $4,500.”

But it is argued that mortgagees cannot be considered
persons contemplated by the statute — and that they cannot
qualify unless they are in possession. The rule that mortgagees
should not vote unless they are in possession, so far as it exists
at all, is statutory — and an examination of the statutes rather
furnishes us with an argument that mortgagees have the same
rights as to voting, etc., as any other owner of a freehold unless
they are expressly excluded. The first Act is (1696), 7 & 8 Wm.
III. ch. 25, which, by sec. 7, provides that “no person or persons
shall be allowed to have any vote in election of members to serve
in Parliament, for or by reason of any trust estate or mortgage,
unless such trustee or mortgagee be in actual possession or
receipt of the rents and profits of the same estate ; but that the
mortgagor, or cestui que trust, in possession, shall and may vote

278

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[VOL.

Riddell, J.

1912

Rex

EX EEL.

Morton

Roberts.

for the same estate, notwithstanding such mortgage or trust .

As it was only freeholders who were given the right to vote, it
seems to me that Parliament considered a mortgagee a free-
holder, and considered that he would have the right to vote,
unless specially legislated against. The same provision exclud-
ing mortgagees and trustees not in possession appears in (1832)
2 Wm. IV. ch. 45, sec. 23, and in (1843) 6 & 7 Viet. ch. 18, sec.
74.

There are cases in which a mere trustee had been held not
entitled to vote — e.g., South Grenville Election, Jones’s Case
(1872), H.E.C. 163, at p. 176 : but that w T as because of the words
‘ 1 in his own right ’ ’ — shewing that it was a real beneficial owner-
ship that was required by the statute.

I can find nothing in principle or authority to prevent a
mortgagee who is assessed for the property qualifying on his
legal estate.

The same considerations apply also to Roberts.

If they make a proper declaration, within ten days, their
appeals will be allowed — but without costs here or below. They
are given an indulgence in being allowed to make now a declara-
tion which should have been made three months ago, and with-
out which they had no right to their seats. It would seem neces-
sary again to call attention to the necessity of observing the
plain directions of the statutes, the forms prescribed, etc.

If the declaration be not made by either within ten days, the
appeal of that one will be dismissed with costs.

While it is, in my view, probable that there is no necessity
for the relator to file an affidavit that the facts as to the defect
in the declaration came to his knowledge only within six weeks
before the notice of motion was served, he will he permitted to
do so, if so advised, for the greater caution in case of an appeal
from this decision, or in case either of the respondents fails to
make the proper declaration.

XXVI.]

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279

[TEETZEL, J.]

National Trust Co. v. Trusts and Guarantee Co.

•

Company — Winding-up — Realisation of Assets — Claim by Trustee for Bond-
holders under Mortgage Given to Secure Bonds — Mortgage Covering Per-
sonal Property — Invalidity for Want of Registration — Bills of Sale and
Chattel Mortgage Act , secs. 2, 5, 23 — Agreement not to Register — Book-
debts — Validity of Transfer without Registration — Absence of Notice to
Debtors — Status of Liquidator to Contest Claim — Representation of
Creditors — Jus Tertii — Parties.

An incorporated manufacturing and trading company made a mortgage to
the plaintiff, as trustee for bondholders, to secure payment of its bonds, of
“its undertakings then made or in course of construction or thereafter to
be constructed, together with all the properties, real or personal, tolls, in-
comes, and sources of money, rights, privileges, and franchises, owned,
held, or enjoyed by it.” The lands were specifically set out in the mort-
gage-deed; and it was “declared and agreed, for the purpose of this
mortgage security, that all machinery, plant, and personal property of
the company are to be considered fixtures to the realty. . . . This

mortgage is not to be registered as a bill of sale or chattel mortgage.”
The company made an assignment for the benefit of creditors; and a
winding-up order was afterwards made, under which the defendant was
appointed liquidator; the defendant then took possession of all the
assets, and realised such as were convertible. The plaintiff claimed the
assets under the mortgage, and brought this action for an account, or,
in the alternative, for damages for conversion:- —

Held, that, as the charge upon the company’s real and personal property
was not created by the bonds, but by the mortgage, the latter was, so far
as it purported to charge personal property, a “mortgage or conveyance
intended to operate as a mortgage of goods and chattels, within the
meaning of secs. 2 and 23 of the Bills of Sale and Chattel Mortgage Act,
R.S.O. 1897, ch. 148; and, not having been accompanied by an immediate
delivery and an actual and continued change of possession of the things
mortgaged, and not having been registered as a chattel mortgage, was, as
such, under sec. 5 of the Act, “absolutely null and void as against credi-
tors of the mortgagor.”

Johnston v. Wade (1908), 17 O.L.R. 372, distinguished.

Semble, that, as a chattel mortgage, it was also* void ab initio as against
creditors, by reason of the agreement that it should not be registered
under the Bills of Sale and Chattel Mortgage Act: Clarkson v. McMaster
& Co. (1895), 25 S.C.R. 96, 105, 106.

Held, also, that, although the mortgage-deed did not specifically mention
present or future book-debts, the language above-quoted was sufficient to
create an equitable charge on present and future book-debts; that book-
debts are not within the Bills of Sale and Chattel Mortgage Act, and a
transfer of them does not require registration; and, therefore, that as
to any book-debts that were unpaid at the date of the assignment by the
company, the plaintiff was entitled to recover the amount that was
realised therefrom by the assignee or the defendant; and that the fact
that no notice of the charge was given by the plaintiff to the debtors did
not alter that right.

Thibaudeau v. Paul (1894), 26 O.R. 385, and Re Perth Flax and Cordage
Co. (1909), 13 O.W.R. 1140, specially referred to.

Held, also, that the liquidator, being from the beginning primd facie law-
fully in possession of the property in question as an officer of the Court,
and being charged with the duty of applying the proceeds in payment
of the company’s creditors in due course of administration, was entitled,
in right of the creditors of the company, to contest the validity of the
plaintiff’s mortgage and to maintain in defence of the action the superior
claim of the creditors whom it represented; and it was not necessary to
have one of the creditors added as a party.

Re Canadian Camera and Optical Co. (1901), 2 O.L.R. 677, 679, followed.

1912
April 17

280

ONTARIO LAW REPORTS.

Teetzel, J.

1912

National
Trust Co.
v.

Trusts

and

Guarantee

Co.

[VOL.

Action by the National Trust Company Limited, trustee for
the bondholders of the Raven Lake Portland Cement Company,
against the Trusts and Guarantee ‘Company Limited, liquidator
of the Raven Lake Portland Cement Company, for an account
of the proceeds of certain goods and chattels, book-debts and
choses in action, alleged to have been converted and sold and
collected by the defendant, or, in the alternative, for damages
for conversion. See Be Raven Lake Portland Cement Co.,
National Trust Co. v. Trusts and Guarantee Co. (1911), 24
O.L.R. 286.

March 11. The action was tried before Teetzel, J., without
a jury, at Toronto.

B. C. H. Cassels, for the plaintiff.

W. Laidlaw, K.C., for the defendant.

April 17, Teetzel, J. : — The plaintiff is trustee for bond-
holders of the Raven Lake Portland Cement Company, herein-
after referred to as the company, and the defendant is liquida-
tor of that company under the Dominion Winding-up Act.

By mortgage dated the 13th September, 1904, the com-
pany duly granted, assigned, transferred and conveyed and
mortgaged to the plaintiff in trust, subject to a certain other
mortgage, all and singular its undertakings then made or in
course of construction or thereafter to be constructed, together
with all the properties, real or personal, tolls, incomes, and
sources of money, rights, privileges, and franchises, owned, held,
or enjoyed by it then or at any time prior to the full payment
of the bonds thereby secured, to secure payment of the bonds
mentioned in the mortgage, amounting to $50,000, and interest.
The lands are specifically set out in a schedule attached to the
mortgage. The mortgage also purports to cover ‘ ‘ all machinery
of every nature and kind, including all tools and implements
used in connection therewith, which are now or which may here-
after, during the currency of this mortgage, be brought upon the
said lands or into any of the buildings thereon, including all
machinery used or to be used in the manufacture of cement and
plant and tools connected therewith. . . . The dredge at

Raven Lake, the machinery, tools, etc., to be deemed fixtures for

XXVI.]

ONTARIO LAW REPORTS.

281

the purpose of this mortgage, whether the same shall be actually
affixed to the said lands or buildings or not.”

The 23rd and 24th clauses read as follows : ‘ ‘ And it is further
hereby declared and agreed, for the purpose of this mortgage
security, that all machinery, plant, and personal property of
the company are to be considered fixtures to the realty. And
it is expressly understood and agreed that this mortgage is not
to be registered as a bill of sale or chattel mortgage. Provided
and it is hereby declared that the company may at all times, so
long as there is no default in payment of principal or interest
on the said bonds or otherwise hereunder, sell and dispose of
its manufactured products in the ordinary course of business,
free from the lien of this mortgage.”

Each bond, a copy of which is set forth in the mortgage, con-
tains this clause: “This bond is one of a series amounting in the
aggregate to $50,000, and is secured by a mortgage duly ex-
ecuted according to law conveying to the National Trust 'Com-
pany Limited as trustee all the present and future real and
personal properties, rights, franchises, and powers of the Raven
Lake Portland Cement Company Limited, as by reference to
the said mortgage will more fully appear; the nature of the
security, the rights of the holders of the bonds secured by it,
and the terms of the trust appear by the said mortgage, to which
reference is hereby expressly directed, and which terms are made
a part of this bond.”

The mortgage contains the usual provisions for redemption,
and that until default the mortgagors shall be permitted “to
possess, operate, manage, use, and enjoy the mortgaged premises,
and to take and use the rents, incomes, profits, and issues thereof,
in the same manner and to the same extent as if these presents
had not been executed.”

It also contains elaborate provisions enabling the mortgagee,
upon default, to take possession and operate or sell the mort-
gaged premises.

The mortgage was duly registered against the lands covered
thereby, but was not filed as a chattel mortgage, nor was any-
thing done to comply with secs. 2, 3, or 23 of the Bills of Sale
and Chattel Mortgage Act, as from the beginning the plaintiffs

Teetzel, J.

1912

National
Trust Co.
v.

Trusts

AND

Guarantee

Co.

282

Teetzel, J.

1912

National
Trust Co.
v.

Trusts

and

Guarantee

Co.

ONTARIO LAW REPORTS. [vol.

assumed that the provisions of that Act did not apply to the
mortgage.

On the 14th September, 1907, the company made a general
assignment for the benefit of its creditors to Henry R. Morton,
who entered into possession as assignee, and proceeded to realise
upon the personal estate of the company.

By order dated the 20th September, 1907, made under the
Dominion Winding-up Act, the company was declared to be
insolvent and ordered to be wound up, the defendant appointed
provisional liquidator, and a reference directed to Mr. Mc-
Andrew, an Official Referee, to appoint a permanent liquidator,
and to take all necessary proceedings for and in connection with
the winding-up of the company. On the 30th November, 1907,
the defendant was appointed permanent liquidator.

The appointment of liquidator having superseded that of
the assignee, the former took possession of all the assets of the
company, and proceeded to convert the same into money and to
collect outstanding accounts and generally to administer the
affairs of the company.

By the 8th September, 1909 (the date of the liquidator’s
statement of receipts and disbursements), the defendant had ap-
parently realised upon all the convertible assets of the company ;
and, so far as I can judge from the statement, those assets con-
sisted chiefly of manufactured cement, sacks* for cement, coal,
book-accounts, and cash received from the assignee as proceeds
of goods sold and book-debts collected, before he handed the
estate over to the defendant. It does not appear that machinery
or anything in the nature of fixtures was realised upon by the
defendant.

By letter of the 9th November, 1907, the plaintiff gave the
defendant notice of the mortgage, stating that it covered all the
property of the company, and was in default, but no steps were
taken to recover the goods and chattels then in the defendant’s
possession, or their proceeds, till October, 1909, when the plain-
tiff served a notice, in the winding-up proceedings, claiming all
the proceeds of the assets of the company realised by the de-
fendant as liquidator, and all other assets (if any) which may
be unrealised in the hands of the liquidator, upon the ground

XXVI.]

ONTARIO LAW REPORTS.

283

that all such assets belonged to the plaintiff by virtue of the
above-recited mortgage.

Nothing appears to have been done under this notice until
the 28th September, 1910, when joint objections to the plain-
tiff’s claim were filed and served by the defendant and the Im-
perial Plaster Company Limited, the latter “on behalf of them
selves and all other creditors of the Raven Lake Portland Cement
Company Limited,” upon the ground, among others, that the
mortgage was void for non-compliance with the Bills of Sale and
Chattel Mortgage Act, and that the assets were not covered by
the mortgage. Instead of adjudicating upon the claim and the
objections thereto, the learned Referee, on the 3rd November,
1910, granted leave to issue a writ and prosecute an action
against the defendant “in respect of goods and chattels and
book-debts and choses in action formerly belonging to the Raven
Lake Portland Cement Company Limited, or the proceeds
thereof, claimed by the National Trust Company Limited.”

This action was accordingly brought, but it is to be observed
that the other contestant, the Imperial Plaster Company Limi-
ted, was neither made a party to the action, nor was its objec-
tion adjudicated upon by the Referee.

An application was made to the Master in 'Chambers by the
defendant to have that company added as a party defendant,
but the motion was refused, and the refusal was sustained on
appeal, without prejudice to an application being made to the
trial Judge, if it should appear to him that the proposed de-
fendant is a necessary party to enable him to adjudicate upon
the title to the money in question.

The statement of claim sets forth the mortgage, alleges de-
fault and non-payment, and charges that, notwithstanding the
plaintiff’s rights under the mortgage, the defendant took pos-
session of certain goods and chattels, the property of the said
company and subject to the plaintiff’s mortgage, and sold the
same, and also collected certain book-debts and choses in action,
the property of the said company, and wrongfully converted the
same to its own use, and refused to deliver the same or account
for the proceeds thereof to the plaintiff ; and the plaintiff claims

Teetzel, J.

1912

National
Trust Co.

Trusts

AND

Guarantee

Co.

284

Teetzel, J.

1912

National
Trust Co.
v.

Trusts

AND

Guarantee

Co.

ONTARIO LAW REPORTS. [vol.

an account of the same, or, in the alternative, damages for con-
version of the said goods, chattels, and book-accounts.

The defendant pleads the winding-up proceedings, disclaims
any personal right or interest in the property, denies unlawful
conversion, submits that the Imperial Plaster Company Limited,
on behalf of itself and all other creditors, should he added as a
party defendant, and repeats the objections to the plaintiff’s
claim set forth in the notice of contestation above referred to.

The following questions arise for determination: —

(1) Does the mortgage hind the goods and chattels in ques-
tion notwithstanding the provisions of the Bills of Sale and
Chattel .Mortgage Act?

(2) Does the mortgage hind the book-accounts in question,
or any of them?

(3) Is the defendant, as liquidator, entitled to contest the
plaintiff’s claim on the ground that the provisions of the Bills of
Sale and Chattel Mortgage Act were not complied with?

(4) If the defendant is not so entitled, should the Imperial
Plaster Company Limited be added as a party defendant?

Upon the first question, counsel for the plaintiff submits that
the mortgage creates a floating security, and as such extends to
all personal property of the company, whether existing at the
date of the mortgage or subsequently acquired, and relies upon
the decision in Johnston v. Wade (1908), 17 O.L.R. 372, to sup-
port his argument that the provisions of the Bills of Sale and
Chattel Mortgage Act are not applicable to this mortgage.

In that case there was not, as in this case, a mortgage to
secure bonds; but the bonds, upon their face and in the condi-
tions endorsed upon them (see p. 390), declared that all the
company’s “ property, real and personal, rights, powers, and
assets of every kind and description, present and future, includ-
ing its uncalled capital,” were charged with the payment of the
bonds. The decision in that case was, that such bonds, issued
pursuant to a by-law passed under the provisions of the Com-
panies Act, then R.S.O. 1897, ch. 191, sec. 49, were not mort-
gages of goods and chattels of an incorporated company within
the meaning of the Bills of Sale and Chattel Mortgage Act, and
were not, therefore, void as against the defendant, the assignee of

XXVI.]

ONTARIO LAW REPORTS.

285

the company for the benefit of creditors, because not registered
under the provisions of that Act. After reviewing the authori-
ties in England which hold that such debentures need not be
registered under the English Bills of Sale Act in order to be
effective against other creditors, and referring to the language
of sec. 2 of the Bills of Sale and Chattel Mortgage Act, R.S.O.
1897, ch. 148 ? the Chief Justice of Ontario (p. 386) observes:
“The words ‘mortgage or conveyance intended to operate as
a mortgage of goods and chattels’ describe instruments of a
well-known character. They do not convey the idea of deben-
tures of the kind in question here, which pass no property in
the goods and chattels to the holder, and confer upon him no
right to take possession of them or interfere with them in any
way, except through the interposition of the Court. It seems
plain that such an instrument was not within the meaning of
the Act or in the mind of its framers, as it stood prior to the
passing of sec. 23. That section, as amended by 4 Edw. VII.
ch. 10, sec. 36, provides that ‘in the case of a mortgage or con-
veyance of goods and chattels of any incorporated company
made to a bondholder or bondholders or to a trustee or trustees
for the purpose of securing the bonds or debentures of such
company,’ the affidavit of bona fides may be made as therein
prescribed. Here again the difficulty presents itself that the
section applies only to a mortgage or conveyance of goods and
chattels. And on its face it seems to exclude a bond or deben-
ture simply. It deals with the case of a mortgage or convey-
ance made for the purpose of securing the bonds or debentures
of a company; and enacts (amongst other things) that the affi-
davit may be made by the mortgagee or one of the mortgagees,
all which seems quite inapplicable to bonds or debentures by
themselves.” Mr. Justice Osier, at p. 388, says: “Section 23 of
the Act shews how far the Legislature intended to go in dealing
with instruments for securing the bonds or debentures of a
company. The only instruments of that class which are re-
quired to be registered are mortgages or conveyances of goods
and chattels made to a bondholder or trustee for the purpose of
securing the bonds or debentures of the company— instruments,
as I understand the section, of the some character as those men-

Teetzel, J.

1912

National
Trust Co.

Trusts

and

Guarantee

Co.

20 — XXVI. O.L.R.

286

ONTARIO LAW REPORTS.

[VOL.

Teetzel, J.

1912

National
Trust Co.
v.

Trusts

and

Guarantee

Co.

tioned in other sections of the Act, something quite different
from the security by way of floating charge which the Com-
panies Act enables a company to create by the bonds them-
selves.” Mr. Justice Meredith, at p. 390, says: “ There was no
mortgage given for securing payment of these bonds, but they,
upon their face and in the conditions endorsed on them, declared
that all the company’s 1 property, real and personal, rights,
powers, and assets 'of every kind and description, present and
future, including its uncalled capital,’ were charged with the
payment of the bonds. That the bonds are not mortgages, or
conveyances intended to operate as mortgages, of goods and
chattels, within the provisions of the Bills of Sale and Chattel
Mortgage Act, I cannot but think plain : they are neither in form
nor in substance such a mortgage. Under them no title to the
property in, or right to possession of, the chattels passed to the
bondholders: a charge upon the chattels and other the pro-
perty of the company was created, giving them priority of pay-
ment out of the assets of the company.”

The validity and effect of what is called a “floating charge”
on the property, both present and future, of a company, has
been the subject of much judicial consideration in England.
The cases are collected and discussed in Palmer’s Company
Law, 9th ed., pp. 307-311, where it is pointed out that it has been
well-settled by the authorities that a floating charge is valid as
against execution and general creditors, whether in a winding-
up or otherwise, and retains its floating character, unless other-
wise agreed, until a receiver is appointed or a winding-up
commences.

As to the injustice to subsequent execution creditors arising
from the nature of a floating security as defined by the authori-
ties, see observations of Buckley, J., in In re London Pressed
Hinge Co., [1905] 1 Ch. 576, at p. 583; also the dissenting judg-
ment of Garrow, J.A., in Johnston v. Wade, 17 O.L.R. at p. 392
et seq.

The English Companies Act, 1908, sec. 93, providing for
registration of floating charges and declaring them void as
against creditors unless registered, would appear to remove the
danger of injustice to other creditors, in England ; and it may be

XXVI.]

ONTARIO LAW REPORTS.

287

that our statute-law should also be amended, in view of the hold-
ing in Johnston v. Wade, by declaring them void against credi-
tors unless registered under sec. 78 of the Ontario Companies
Act, 1907.

As pointed out by the Chief Justice of Ontario, in Johnston
v. Wade , at p. 386, the English cases, “ turning as they do upon
the terms of legislation which is not the same as our provincial
legislation, afford but little assistance, and in the last analysis
we must have recourse to the language of the Acts of our own
Legislature;” and the judgment in that case is clearly based
on the conclusion that a debenture qn its face charging the
property of a company with its payment was not a “mortgage
or conveyance intended to operate as a mortgage of goods and
chattels,” within the meaning or comtemplation of our Bills of
Sale and Chattel Mortgage Act.

That case is, therefore, differentiated from this case by the
fact that in this case the bonds do not create the charge, but a
mortgage is given which creates the charge in favour of a trustee
for the bondholders; and, although it embraces the company’s
real as well as its personal property, I think that, so far as it
purports to charge personal property, it is clearly a “mortgage
or conveyance intended to operate as a mortgage of goods and
chattels,” within the meaning of secs. 2 and 23 of our Bills of
Sale and Chattel Mortgage Act; and, not having been accom-
panied by an immediate delivery and an actual and continued
change of possession of the things mortgaged, and not having
been registered as a chattel mortgage, is, as such, under sec. 5
of the Act, “absolutely null and void as against creditors of the
mortgagor. ”

As a chattel mortgage, it was also void ab initio as against
creditors, according to the view of the late Chief Justice Strong
in Clarkson v. McMaster & Co. (1895), 25 S.C.R. 96, at pp. 105-
6, by reason of the agreement that it should not be registered
under the Bills of Sale and Chattel Mortgage Act.

Then, as to the book-debts, it is well settled that they are not
within the Bills of Sale and Chattel Mortgage Act, and that a
transfer of them does not require registration : Kitching v. Hicks

Teetzel, J.

1912

National
Trust Co.
v.

Trusts

and

Guarantee

Co.

288

Teetzel, J.

1912

National
Trust Co.

Trusts

and

Guarantee

Co.

ONTARIO LAW REPORTS. [vol.

(1884), 6 0. R. 739; Tailby v. Official Receiver (1888), 13 App.
Cas. 523; Thibaudeau v. Paul (1894), 26 O.R. 385.

While the mortgage in question does not specifically mention
present or future hook-debts, I think the language “ under-
takings . . . together with . . . incomes, and sources of

money, rights, privileges . . . held or enjoyed by it now or

at any time prior to the full payment,” etc., is sufficiently com-
prehensive to create an equitable charge on present and future
book-debts. In Re Perth Flax and Cordage Co. (1909), 13
O.W.R. 1140, where the language of the chattel mortgage was
“all property, real and personal, that shall hereafter be ac-
quired and owned by the company,” it was held that these
words were amply sufficient to include future book-debts. A
charge created by such general language as that employed in
this mortgage attaches, I think, to the subject charged, in the
varying condition it happens to be from time to time. See
Governments Stock and Other Securities Investment Co. v.
Manila R.W. Co., [1897] A.C. 81, at p. 86; and Buckley's Com-
panies Acts, 9th ed., pp. 230, 231.

I am of opinion, therefore, that as to any book-debts that
were unpaid at the date of the assignment by the company, the
plaintiff is entitled to recover the amount that was realised there-
from by the assignee or the defendant; and that the fact that
no notice of the charge was given by the plaintiff to the debtors
does not, as argued by Mr. Laidlaw, alter that right. Upon this
point, Thibaudeau v. Paul {supra)., Re Perth Flax and Cordage
Co. {supra), and Eby-Blain Co. v. Montreal Packing Co. (1908),
17 O.L.R. 292, are, I think, conclusive.

The question of the right of the defendant as liquidator to
contest the plaintiff's claim under the mortgage, and to hold
the proceeds of the chattel property for the benefit of the credi-
tors, has given me much trouble ; but I have arrived at the con-
clusion that the defendant has that right, and that it is not
necessary, for the purpose of adjudicating upon the title to the
fund in question, to add the Imperial Plaster Company as a
defendant. Under sec. 33 of the Winding-up Act, the liquida-
tor, upon his appointment, ‘ ‘ shall take into his custody or under
his control, all the property, effects and choses in action to which

XXVI.]

ONTARIO LAW REPORTS.

289

the company is or appears to be entitled.” Having done this,
further general duties are, as stated in Palmer’s Company Law,
9th ed., p. 395, “to make out the requisite lists of contributories
and of creditors, to have disputed cases adjudicated upon, to
realise the assets, and to apply the proceeds in payment of the
company’s debts and liabilities, in due course of administration,
and, having done that, to divide any surplus amongst the con-
tributories, and to adjust their rights.”

While the title of the estate of the company does not, under
the Act, vest in the liquidator, it must clearly be his duty, as an
officer of the Court, when he has in his custody property to
which the company appears to be entitled, to protect that pro-
perty for the benefit of the creditors who may be interested
therein. Now, when the defendant, as liquidator, took posses-
sion of the property in question, which was then in the posses-
sion of the company’s assignee for creditors, it was property to
which, within the meaning of sec. 33, the company or its assignee
for creditors “appeared to be entitled.”

Had the liquidator given up this property or its proceeds,
either when notified of the plaintiff’s mortgage or when the pro-
perty was demanded, without submitting to the Court the claim
on behalf of creditors to the effect that the plaintiff’s mortgage
was void as against them, the liquidator would, I think, have
committed a gross breach of duty. When the claim was pre-
sented, by the plaintiff, the liquidator joined with a creditor
on behalf of all other creditors of the company in contesting
it, under secs. 85 to 90 of the Act. Instead of submitting to a
summary disposition of the matter before the Official Referee,
the plaintiff elected, upon leave of the Court, to bring this
action against the liquidator only.

In Re Canadian Camera and Optical Co. (1901), 2 O.L.R.
677, at p. 679, Street, J., observes: “It is necessary to bear in
mind the position in which a liquidator stands in a compulsory
winding-up, viz., that, while in no sense an assignee for value
of the company, yet he stands for the creditors of the company,
and is entitled to enforce their rights, because their right to pro-
secute actions themselves against the company and to recover
their claims directly out of the property of the company is taken
away by the Winding-up Act.”

Teetzel, J.

1912

National
Trust Co.
v.

Trusts

and

Guarantee

Co.

290

ONTARIO LAW REPORTS.

Teetzel, J.

1912

National
Trust Co.
v.

Trusts

and

Guarantee

Co.

[VOL.

Being, therefore, from the beginning, primd facie lawfully
in possession of the property in question, as an officer of the
Court, and being charged with the duty of applying the pro-
ceeds in payment of the company’s creditors in due course of
administration, I hold that the defendant is entitled, in right
of the creditors represented by it as liquidator, to contest in this
action the validity of the plaintiff’s mortgage.

Under the circumstances found in this case, the liquidator is,
I think, entitled to maintain in defence of the action the super-
ior claim of the creditors whom it represents.

Discussing the defence of jus tertii, it is stated in Clerk &
Lindsell on Torts, 3rd ed., p. 252, that, “if the plaintiff makes
out a good primd facie title by possession or otherwise, the de-
fendant must in the first place impeach that title by shewing
that there is a better right in some one else. That better right
may be in himself or in some person under whose authority he is
acting, or under whom he claims, and in such a case he clearly
has a good defence, for a man cannot be guilty of trespass or
conversion in respect of goods to the possession of which he is
entitled. ’ ’

Here the defendant’s position is strengthened by the fact
that, at the time of the action, the primd facie title by possession
was in the defendant. See, further, as to defence of title of third
party, Richards v. Jenkins (1886), 17 Q.B.D. 544, affirmed in
(1887), 18 Q.B.D. 451.

Judgment will be in favour of the plaintiff for payment by
the defendant of all money realised from book-debts outstanding
and unpaid at the date of the 'assignment, the 14th September,
1907, but dismissing the balance of the plaintiff’s claim, and
declaring that the mortgage was as a chattel mortgage void as
against the creditors of the company. No costs of action to either
party, but the defendant’s costs will be paid out of the balance
of the fund, as between solicitor and client.

If the parties cannot ag-ree upon the amount to be paid to
the plaintiff, there will be a reference to the Master in Ordinary,
with costs of such reference reserved until after the Master’s
report.

XXVI.]

ONTARIO LAW REPORTS.

291

[MEREDITH, C.J.C.P.]

Townsend v. Northern Crown Bank.

Banks and Banking — Securities Taken by Bank under sec. 90 of Bank Act
— Securities upon Sawn Lumber — Wholesale Dealer — “Products of the
Forest” — “And the Products thereof” — Bank Act, sec. 88(1) — Assign-
ment for Benefit of Creditors — Securities Given within Sixty Days —
Continuation of Former Securities — Assignment of Building Contracts
— Lumber Used in Building — Assignment of Book-debts.

The words “and the products thereof,” in sub-sec. 2 of sec. 74 of the Bank
Act, 53 Viet. ch. 31 (now, with some immaterial changes, sub-sec. 1 of
sec. 88 of RjS.C. 1900, ch. 29), apply to all the articles previously men-
tioned in the sub-section, and, therefore, apply to the products of the
forest.

Dictum of Hall, J., in Molsons Bank v. Beaudry (1901), Q.R. 11 K.B. 212,
approved.

Semble, that sawn lumber is a product of the forest, within the meaning of
the sub-section.

Held, upon the evidence, that B. was a wholesale dealer in lumber, and,,
therefore, a person from whom securities upon lumber could lawfully
be taken by the bank, under the sub-section.

Held, also, upon the evidence, that, although the security under which the
bank claimed was given less than sixty days before the making of an
assignment by B. to the plaintiff for the benefit of his creditors, it was
a continuation of a former security of the like character held by the
bank for the .indebtedness, and was entitled to prevail against the
assignment.

Held, also, that doors and window sashes and the like, manufactured from
lumber upon which the bank held security, were products of the lumber
covered by the securities.

Some of the lumber covered by the securities was used by B. in the erection
of buildings: —

Held, that, so- far as the money payable under the building contracts
assigned to the bank represented the lumber so used, the bank were
entitled to it.

Held, also, that the bank’s claim to book-debts assigned by B. could not
prevail against the assignment to the plaintiff.

The plaintiff, the assignee for the benefit of creditors of
Joseph E. Brethonr, a builder, contractor, and dealer in lum-
ber, brought this action to set aside certain securities given by
Brethour to the defendants to secure his indebtedness to them.

June 14, 1911. The action was tried before Meredith, C.J.
C.P., without a jury, at Toronto.

W. Laidlaw, K.C., for the plaintiff.

F. Arnoldi, K.C., for the defendants.

1912

April IS

April 18, 1912. Meredith, C.J. : — The securities which
are attacked are securities taken by the defendants under sec..

292

ONTARIO LAW REPORTS.

Meredith, C.J.

1912

Townsend

Northern

Crown

Bank.

[VOL.

90 # of the Bank Act, R.S.C. 1906, ch. 29, and assignments by
Brethonr of moneys payable to him under building contracts
which he had entered into, and book-debts, and these securities
were given within sixty days before the making of the assign-
ment; and the plaintiff attacks them on several grounds.

The securities taken under sec. 90 of the Bank Act are
attacked on two grounds.

It was contended that Brethour was not a person from
whom securities upon lumber could lawfully be taken,
because, as is said, he was a builder, and not a wholesale
dealer in lumber.! The evidence does not support this con-
tention, but shews that part of the business which Brethour
carried on was that of a wholesale dealer in lumber.

It also contended that sawn lumber is not a product of the
forest, within the meaning of sec. 88.

In support of this contention Molsons Bank v. Beaudry
(1901), Q.R. 11 K.B. 212, was cited. The opinion of the Chief
Justice (Sir Alexander Lacoste) in that case, no doubt, sup-
ports the contention. Hall, J., however, differed from the Chief
Justice, and the other member of the Court (Wurtele, J.) ex-
pressed no opinion on the point. The question was not neces-
sary for the decision, as the Court was unanimous in affirming

*90. The bank shall not acquire or hold any warehouse receipt or bill
of lading, or any such security as aforesaid, to secure the payment of any
bill, note, debt, or liability, unless such bill, note, debt or liability is nego-
tiated or contracted, —

(a) at the time of the acquisition thereof by the bank; or,

(b) upon the written promise or agreement that such warehouse receipt
or bill of lading or security would be given to the bank;

Provided that such bill, note, debt, or liability may be renewed, or the
time for the payment thereof extended, without affecting any such security.

2. The bank may, —

(a) On shipment of any goods, wares and merchandise for which it
holds a warehouse receipt, or any such security as aforesaid, surrender
such receipt or security and receive a bill of lading in exchange thereof ; or,

(b) on the receipt of any goods, wares and merchandise for which it
holds a bill of lading, or any such security as aforesaid, surrender such bill
of lading or security, store the goods, wares and merchandise, and take a
warehouse receipt therefor, or ship the goods, wares and merchandise, or
part of them, and take another bill of lading therefor.

f Section 88, sub-sec. 1, of the Bank Act, B.S.C. 1906, ch. 29, provides:
The bank may lend money to any wholesale purchaser or shipper of or
dealer in products of agriculture, the forest, quarry and mine, or the sea,
lakes and rivers, or to any wholesale purchaser or shipper of or dealer in
live stock or dead stock and the products thereof, upon the security of
such products, or of such live or dead stock and the products thereof.

XXVI.]

ONTARIO LAW REPORTS.

293

on other grounds the judgment that had been given against the
plaintiffs.

The provision of the Bank Act then under consideration was
sub-sec. 2 of sec. 74 of 53 Yict. ch. 31, which reads as follows:
“2. The bank may also lend money to any wholesale purchaser or
shipper of products of agriculture, the forest and mine, or the
sea, lakes and rivers, or to any wholesale purchaser or shipper
of live stock or dead stock, and the products thereof, upon the
security of such products, or of such live stock or dead stock,
and the products thereof.” That sub-section was repealed by
sec. 17 of 63 & 64 Yict. ch. 26, and re-enacted, with some changes
that are not material to the present inquiry ; and the substituted
sub-section appears in R.S.C. 1906, ch. 29, as sub-sec. 1 of sec. 88.

Meredith, C.J.

1912

Townsend

Northern

Crown

Bank.

In my view, the construction placed by Hall, J., on sec. 74,
was the correct one. In my opinion, the words “and the pro-
ducts thereof,” in the fourth and fifth lines, apply to all the
articles previously mentioned in the sub-section, and, there-
fore, to the products of the forest, and the words “the
products thereof, ’ ’ in the last line, apply as well to the products
mentioned in the earlier part of the sub-section as to the pro-
ducts of live stock and dead stock.

Being of this opinion, it is unnecessary to express an opin-
ion as to whether sawn lumber is a product of the forest, within
the meaning of the sub-section ; but I am inclined to think that
it is.

It is further contended that, as the security under which the
defendants claim was given less than sixty days before the mak-
ing of the assignment, it cannot prevail against the assignment.
That security was, however, but a continuation of a former
security of the like character held by the defendants for the
indebtedness; and this contention, therefore, fails.

Some of the lumber upon which the defendants held security
was manufactured into doors and window sashes and the like,
and these products of the lumber are covered by the securities :
R.S.C. 1906, ch. 29, secs. 88, 89.

None of the other articles covered by the securities are within
sec. 88 of the Revised Act; and the securities do not, therefore,
extend to them.

294

ONTARIO LAW REPORTS.

Meredith, C.J.

1912

Townsend

Northern

Crown

Bank.

D. C.
1912

April 18

VOL.

Some of the lumber covered by the securities was used by
Brethour in the erection of buildings; and, as far as the money
payable under the building contracts assigned to the defendants
represents the lumber so used, they are entitled to it.

The claim of the defendants to the hook-debts cannot be
supported; and, indeed, according to my recollection of what
took place at the trial, it was abandoned.

If the parties cannot agree as to it, there will he a reference
to the Master in Ordinary to determine what part of Brethour ’s
stock in trade at the time of the assignment, not being lumber,
was the product of lumber covered by the defendants 7 securities,
and what part, if any, of the money payable under the building
contracts assigned represented lumber or the products of lumber
covered by those securities.

As success is divided, there will be no costs to either party.

[DIVISIONAL COURT.]

Re Denton.

Will — Construction — Gift to Brothers and Sisters — Death of Sister between
Date of Will and Death of Testator — Right of Children of Deceased
Sister as Secondary Legatees.

Held, reversing the judgment of Riddell, J., 25 O.L.R. 505, upon one of the
questions arising upon the will, that the children of the sister who died
before the testator, but after the date of the will, were entitled to her
share of the “remainder” under clauses 7 and 8 of the will.

Review of the authorities.

Appeal by J. H. Dickenson, representative of Naomi Dicken-
son, deceased, from the order of Riddell, J., 25 O.L.R. 505, upon
one of the question submitted as to the construction of the will
of John M. Denton, deceased.

April 3. The appeal was heard by a Divisional Court com-
posed of Boyd, C., Latchford and Middleton, JJ.

T. G. Meredith, K.C., for the appellant. The question for
decision arises under the 7th and 8th clauses of the will, and is,
whether or not the children of Naomi Dickenson, who died after
the date of the will, but predeceased the testator, are entitled to
share in the remainder of the fund formed under clause 7 — in

XXVI.]

ONTARIO LAW REPORTS.

295

other words, whether the gift under clause 8 is substitutionary D * c -
or substantive. The learned Judge in the Court below held that 1912
the gift was substitutionary only, and accordingly excluded the Re Denton.
children of Naomi, considering that he was bound by the prin-
ciples and authorities cited by him, although the contrary view
appeared to him to be more agreeable to common sense. The
law is stated in Theobald on Wills, 7th ed., p. 671, and it is
submitted that the appellant’s case is supported by the principles
there laid down, which are not affected by the cases cited on
behalf of the respondents. In Thornhill v. Thornhill (1819), 4
Madd. 377, relied on by the learned Judge, the language is not
the same as here, and that case has been disapproved of in
Smith v. Smith (1837), 8 Sim. 353, per Shadwell, V.-C., at p.

357. In re Potter’ s Trust (1869), L.R. 8 Eq. 52, which the
learned Judge says is explained in In re Hotchkiss’s Trusts
(1869), L.R. 8 Eq. 643, is in our favour and is good law to-day,
and the appellant’s case is even stronger. In re H annum,

[1897] 2 Ch. 39, has been referred to as against our contention,
but falls far short of justifying such a conclusion. [Middleton,

J., referred to Re Fleming (1904), 7 O.L.R. 651.] Re-
ference was made to Cort v. Winder (1844), 1 Coll. 320,
and to Loring v. Thomas (1861), 1 Dr. & Sm. 497, where Chris-
topherson v. Naylor (1816), 1 Mer. 320, is distinguished; also
to In re Woolrich (1879), 11 Ch. D. 663. The appellant relies
on Loring v. Thomas , which has never been disapproved, as
giving the principle on which this case should be decided.

M. D. Fraser, K.C., for the beneficiaries under the will other
than Naomi Dickenson, relied upon the judgment of Riddell,

J., and the cases there cited, and the principle laid down in the
line of authorities from Christopher son v. Naylor, in 1816, to In
re Hannam, in 1897, as shewing that where the gift is, as here,
by way of substitution, the children of a person predeceasing
the testator are excluded. He referred to Re Fleming, supra;

Re Williams (1903), 5 O.L.R. 345; In re Clark (1904), 8 O.L.R.

599. In re Potter’s Trust, supra, on which the appellant relies,
cannot be treated as a binding decision, and James, V.-C., dis-
cussing that case in In re Hotchkiss’s Trusts, supra, holds that
Christopher son v. Naylor is still an authority. It may be ad-

ONTARIO LAW REPORTS. [vol.

mitted that the appellant’s case appeals to sympathetic feeling,
but the law is the other way.

Joseph Montgomery, for the executor, took no part in the
argument, but stated that his client would not be sorry if what
had been called the “common sense” view of the case should
prevail.

Meredith, in reply, argued that Loring v. Thomas covered
the case, and had not been overruled. He referred to In re
Metcalfe, [1909] 1 'Ch. 424, in which the Loring case was
followed.

April 18. Bovd, C. : — The 7th and 8th clauses of the will are
these : —

(7) After the death of my wife to sell property and pay to
sister Naomi and to Mary $500 and to divide the remainder
equally amongst all my brothers and sisters, including Naomi
and Mary.

(8) 'Should any of my brothers or sisters die before the final
division of my estate leaving lawful issue then and in such case
I desire that the share which such deceased brother or sister
would have been entitled (to) if living shall be divided equally
amongst the children of such deceased brother or sister so that
such child or children shall take the portion which his or her or
their parent would have been entitled (to) if living.

Upon questions submitted to the Court touching the proper
construction of John M. Denton’s will, the fifth one was this:
Are the children of Naomi entitled to share, under the provi-
sions of clause 8, in the remainder of the fund formed under
clause 7 of the will ?

The Judge’s answer is that these children are excluded.
From this the present appeal is lodged.

The important dates are these. The will of the testator was
dated and made the 24th June, 1889. The sister of the testator,
Naomi, died in 1892, leaving children. The testator died in
1896. His widow died in 1910. At that time in 1910, his estate
became finally divisible upon * the death of the life-tenant.
Naomi died before this final division; she also died before the
testator; but the important point which appears to have been

XXVI.]

ONTARIO LAW REPORTS.

297

passed by unconsidered is, that she was alive at the date of c -

the will, and formed then one of the class capable of sharing in

the residue, when it should fall to be divided. The learned Re Denton.
Judge, applying the solvent of “common sense,” thought the Boyd. c.
testator intended to benefit the children of Naomi, but was com-
pelled by authority to decide the other way. But, bearing in
mind the cardinal fact that the sister was alive at the date of
the will, there appears to be comparative concord in the later
case-law in favour of the bequest to the children being well and
legally bestowed.

Grant, M.R., in Christopherson v. Naylor, 1 Mer. 320
(1816), laid down the proper method of inquiry. Who are the
primary legatees? Who are capable of taking in the first place
by the terms of the will? Having found these, then the repre-
sentatives or issue of these are by the will made to stand as sub-
stitutes in place of the original legatee who had died. Whether
the time of death be before the death of the testator or the
tenant for life or the period of distribution does not matter, so
long as you find the primary legatee having capacity to take
named in the will. This was in 1816 : and in 1843 an accur-
ate Judge summarised the state of decision on this point
in Gray v. Garman (1843), 2 Hare 268: “It has, indeed, been
made a question, whether the capacity of the primary
legatee (at the date of the will) to take the legacy was alone
sufficient, whether such legatee must not survive the testator,
become a legatee in esse, and not have been a legatee in
posse only to entitle his issue to claim in substitution . . .

But later cases appear to sanction a more liberal, though still a
literal, construction of language like that I am considering. And
it has been held, that the issue of a person primarily pointed
out as the object of a testator’s bounty, and living at the date of
the will, may take in substitution for that party dying in the
lifetime of the testator” (citing cases) ; and the Vice-Chancellor
(Wigram) ends by saying — “A construction which is certainly
fortified by very important analogies:” p. 271.

The gloss of Sir John Romilly in Ive v. King (1852), 16
Beav. 46, at p. 53, cited in the judgment below, 25 O.L.R. at
p. 511, and founded upon the cases he refers to, appears to be

298

ONTARIO LAW REPORTS.

[VOL.

D. C. too wide: as Coulthurst v. Carter (1852), 15 Beav. 421, was a

case where the parent was dead at the date of the will; so was

Re Denton. Waugh v. Waugh (1833), 2 My. & K. 41; and so was Peel v.

Boyd, c. Cailoiv (1838), 9 Sim. 372; and the last case cited by the Master

of the Rolls, Romilly, Christopher son v. Naylor, I have already
referred to as being on the same state of facts. Congreve v.
Palmer (1852), 16 Beav. 435, was in like manner a case where
the sister was dead at the date of the will, and had, therefore,
no capacity to take and did not take by the terms of the will.

In re Potter’s Trust, L.R. 8 Eq. 52, is quoted in the judg-
ment under appeal, and 'Malms, V.-O., there affirms the law to
be on reason thus : ‘ ‘ Wherever there is a gift to a class, with a
gift by substitution to the issue or children of those who shall
die, the children take what their parents would have taken if
living at the testator’s death, without regard to the question
whether the parents died before or after the date of tfye will.”
That is an unquestioned statement of law, so far as relates to
parents dying after the date of the will, but it has provoked con-
troversy as to those who were dead at the date of the will. On
this head it seeks to controvert Christopher son v. Naylor, but on
this branch of the inquiry we have no concern in order to dis-
- pose of the present appeal. The controversy is raised in In re
Hotchkiss’s Trusts, L.R. 8 Eq. 643, 650: but the case itself is an
express decision that where the gift is to a class of persons
living at the date of the will, the children of those who died be-
tween the date of the will and the testator are entitled.

Thornhill v. Thornhill, 4 Madd. 377, is apparently an off-
hand decision of the Vice-Chancellor, who had the reputation of
determining without hearing, and is but meagrely reported.
The case seems to have turned on the language of the will giv-
ing the children the share of the parent ; and, as the parent died
in the testator’s lifetime, he never had a share to transmit to the
children; and on this ground it may be supported, and it is so
treated by Mr. Theobald: see Theobald on Wills, 7th ed., p. 671.
And he distinguishes it from cases where (as in the present will)
what is given to the issue is the share or portion which a member
of the class would have taken if he had lived, in which the sub-
stitution operates as regards a person who dies in the testator’s

XXVI.]

ONTARIO LAW REPORTS.

299

life 'but who was alive at the date of the will. Thornhill v. D. c -

Thornhill is approved and followed by North, J., in In re Han- 1912

nam, [1897] 2 Ch. 39; but it has not otherwise been received Re Denton.
with favour ; and both cases are any way clearly distinguishable Boyd. c.
from this case, where the testator’s language expressly provides
for the case of one dying before getting or being entitled to any
share prior to the final distribution.

The point is thus put by Kay, J., in In re Webster’s Estate
(1883), 23 Ch. D. 737, 739: “ Where there is a gift to a class
and then a substitutionary gift of the share of any one of the
class who should die in the lifetime of the testator, no one can
take under the substitutionary gift who is not able to predicate
that his parent might have been one of the original class, and
consequently if the parent was dead at the date of the will,
and therefore by no possibility could have taken as one of the
original class, his issue are not able to take under the substitu-
tionary gift.”

But I favour the construction of this will as one in which the
gift is not strictly of substitutionary character, but as present-
ing two classes of original legatees: one, the primary legatees,
the brothers and sisters of the testator who are alive at
the time of final distribution after the death of the testator’s
wife ; the other, the secondary legatees, consisting of the issue or
th'e children of any of the primary legatees who may die leav-
ing issue before the period of final distribution. I would adopt
and apply the language of Kindersley, V.-C., as used in Lan-
phier v. Buck (1865), 34 L.J. Ch. 650, 656: “The gift is to
two classes of objects, to such nephews and nieces as shall be
living at a given time, and to the issue of such nephews and
nieces as shall be dead at that time. Is that an original gift to
the issue, or a gift by substitution? Clearly an original gift to
them. It is true you may say in a sense they are substituted
for their parents, because they take the share respectively
among them which their parent would, if he had come under
the first , class, have himself taken, and in that sense (but that
is not the accurate and proper sense) you may say that there is
a substitution ; but it is as much an original gift to the issue of
such of the nephews and nieces as shall have died before the

300

ONTARIO LAW REPORTS.

[VOL.

D. C.
1912

He Denton.

Boyd, 0.

tenant for life” (or the period of distribution) “as it is an orig-
inal gift to such of the nephews and nieces as shall be living at
the death of the tenant for life” (or other fixed period).

I find no authority preventing us from giving effect to the
clear and obvious meaning of the testator, that the children of
his sister should take the share intended for their parent had she
been alive. The whole field of testamentary interpretation in
this regard has been broadened, and, if I may say so, humanised,
by the exposition of the subject by the Lords in Barraclough v.
Cooper (1905), as reported in a note to the case of In re Lam-
bert , [1908] 2 Ch. 117, at pp. 121-126. They repudiate any
canon of construction beyond the fact that enough is found
in the language of the instrument to shew what was the mean-
ing of the testator. And Lord Macnaghten quotes with emphatic
approval the words of Vice-Chancellor Kindersley in Loring v.
Thomas, 1 Dr. & Sm. 510, as follows : ‘ ‘ Now, of course the ques-
tion is one of intention, and it is obvious that in cases of this
kind a testator may mean to include as objects of his bounty, or
he may mean to exclude, the issue of the predeceased children.
When a testator directs that issue shall represent or stand in the
place of or be substituted for a deceased child, and take the
share which their parent would have taken if living, he may
intend such representation or substitution to apply only to the
case of the child dying subsequently to the date of his will and
before the time of his own death; or he may mean it to extend
also to the case of the child who was already dead at the date
of the will. The solution of the question, which of the two he
intended, must of course depend on the language he has used
in indicating such representation or substitution. He may use
language of such restricted import as to be inapplicable to any
children but such as are living at the date of the will. But if
he uses language so wide and general as to be no less applicable
to a predeceased child than to a child living at the date of the
will, then the direction as to such representation or substitution
must be held to embrace both. ’ ’

The House of Lords have in effect given their sanction to
the vigorous words of James, V.-C., in Habergham v. Ride-
halgh (1870), L.R. 9 Eq. 395. He says (p. 400) : It was con-

XXVI.]

ONTARIO LAW REPORTS.

301

tended by Mr. Kay that a gift to A., and a class of persons, is H 0.

also a gift to a class, and that with regard to that class this rule

has been laid down: that in order to determine the class you Re Dentox.
must take the persons who answer the description at the death Boyd, c.
of the testator. That implies that Where there is a gift to a
class, that means a gift to such of the class as shall be living at
the death of the testator; and it follows that no one member
of the class who may have died in the lifetime of the testator
will be entitled. That reasoning is a very good illustration of
the process by which in this Court we have established a body of
dogma, and developed a whole code of artificial rules, according
to which a testator's will is treated as if it were something
written in cypher, and incapable of being construed except by
those learned persons who have the key of the cypher. Never-
theless, sometimes the Court is enabled to determine questions
arising upon wills according to the rules of common sense ; either
by playing off one rule against another, or by resorting to some
general rule of construction which controls the rest.” And the
Vice-Chancellor proceeds to act accordingly.

A case of Re Fleming, 7 O.L.R. 651, decided by Mr. Justice
Street, supports the view taken on this appeal.

I agree with my ‘brother Riddell as to the meaning of the
testator; and I do not read the authorities cited as going to
interfere with the operation of common sense in the construc-
tion of the testator’s language.

I rather favour giving costs of this appeal out of the estate.

Latchford, J. : — I agree.

Middleton, J. : — I entirely agree. Lindley, L. J., in In re
Palmer, [1893] 3 Ch. 369, in dealing with a case where the Judge
of first instance had thought that he was precluded . by prior de-
cisions from giving effect to the testator’s intention, uses words
peculiarly apt here (p. 373) : “The result in all these cases
has been, in my opinion, to miss the intention as expressed, and,
unfortunately, to defeat it without sufficient grounds. This line
of cases affords a striking illustration of the mischief done by
construing one will by paying too much attention to decisions on

21 — XXVI. O.L.R.

*3 P O

UvyU

D. C.
1912

Re Denton.

Middleton, J.

ONTARIO LAW REPORTS. [voi,

other wills. Rules of law must be attended to ; hut if in any case
the intention of a testator is expressed with sufficient clearness
to enable the Court to ascertain it, the Court ought to give effect
to it in that case, unless here is some law which compels the
'Court to ignore it; and the mere fact that in other wills more
or less like it other Judges have not been satisfied as to the inten-
tions expressed in them, is not sufficient ground for defeating
an intention where the Court holds it to be sufficiently expressed
in the particular will which it is called upon to construe.”

Quite apart from cases, the language of the testator here ad-
mits of no possible doubt. The testator has directed the pro-
perty to be set apart and held during the lifetime of his wife.
Upon the death of the wife, it is then to be divided equally
amongst all his brothers and sisters, including Naomi Dicken-
son, who is expressly named;' and the testator then provides that,
should any of his brothers or sisters die before the final division
of his estate, leaving lawful issue, the share which the deceased
brother or sister would have been entitled to, if living, shall go
to the children of the deceased brother or sister.

The will as to persons speaks from its date. Naomi died
during the testator’s lifetime. I can find no warrant for read-
ing into this will a provision which would exclude her children
from sharing because she predeceased the testator. This would
be clearly contrary to the express intention of the will. The
analysis of the cases by my Lord makes it plain that there is no
authority compelling us to do violence to the testator’s language
and frustrate his intention.

Appeal allowed ; costs out of the estate.

XXVI.]

ONTARIO LAW REPORTS.

303

[DIVISIONAL COURT.]
Underwood v. Cox.

Contract — Family Settlement — Unfounded Claims — Fraud and Misrepresen-
tation — Inducement for Executing Document — Threats — Absence of In-
dependent Advice — Evidence — Threatening Letter Written “without
Prejudice ” pendente Lite — Admissibility.

The defendant, who was the principal beneficiary under the will of her
father, made an agreement with the plaintiffs, her brother and sister,
and with another sister, by which she covenanated to pay over to them
the greater part of what she was to receive under the will. One of the
plaintiffs had opposed the granting of probate of the will, and had filed
a caveat ; and the agreement purported to be by way of compromise or
settlement of the plaintiffs’ claims to the estate: —

Held, in an action to enforce the covenant, that, upon the evidence, the
plaintiffs had no grounds for attacking the disposition of his property
made by the father, and that the defendant was in fact induced, by
threats made by her brother, one of the plaintiffs, to execute the agree-
ment, without competent independent advice and under pressure of the
threats ; and, therefore, the agreement was not enforceable.

A letter written to the defendant by her brother above-mentioned, pendente
lite, and containing veiled threats, though purporting to be written
“without prejudice,” was admitted as evidence for the defendant.

Pirie v. Wyld (1886), 11 O.R. 422, followed.

Judgment of Kelly, J., reversed.

Action to recover $964.70 and interest upon a covenant in
an agreement.

January 17, 18, 19, and 26. The action was tried before
Kelly, J., without a jury, at Toronto.

R. TJ. McPherson and J. W. McCullough , for the plaintiffs.

O'. Waldron , for the defendant.

February 28. Kelly, J. : — This action is brought by Wil-
liam J. Underwood and his sister, Catharine Laurie, against
their sister, Jane Cox, for payment of $964.70 and interest,
claimed as their two-thirds share of an amount agreed by the
defendant to be paid to the plaintiffs and another sister, Mary
Ann Cox, by an agreement dated the 5th May, 1910.

The defence set up is, that the defendant was induced to
sign the agreement by the misrepresentation, fraud, intimida-
tion, duress, and undue .influence of the plaintiff Underwood
and Joseph Laurie, husband of the plaintiff Laurie, and that
she signed it without knowing its contents and without legal
advice as to her rights.

D. C.
1912

Feb. 28.
April 18.

304

ONTARIO LAW REPORTS.

[VOL.

The parties to the agreement are children of Francis Under-
wood, deceased, who by his will, dated the 2nd August, 1902, and
a codicil thereto, dated the 1st March, 1905, gave to Ida Frances
Cox, the minor daughter of the defendant, an organ and a
mortgage which he held for $1,000 on the property of the defen-
dant and her husband, and all the rest of his estate to the
defendant.

The testator died on the 27th March, 1910 ; and his executors
applied for probate of the will; the plaintiffs and Mary Ann
Cox filed a caveat against the issue of probate, alleging that
the will was not executed by the testator, or, if so, that it was
executed under undue influence and duress, and that he was not
of sound mind, memory, and understanding.

D. C.
1912

Underwood

Cox.
Kelly, J.

The real ground, however, of the plaintiff Underwood’s ob-
jection to the disposition made by the testator of his estate is
found in the claim which he had, or believed he had, against the
testator and his estate, arising out of an agreement or under-
standing between the father and son. Several years prior to his
death, the father obtained from the son a conveyance of certain
property, at a price much less than its real value, on the promise
that, at his death, the son would be given a substantial part of
his estate. The son honestly believed that he was entitled to
enforce this claim against his father’s estate, or to share in the
assets of the estate ; he also claimed the organ which his father
bequeathed to the defendant’s minor daughter, and which, the
evidence shews, had been at some time looked upon as belonging
to him. The claim of the plaintiff Catharine Laurie was, that
she had been promised by her father consideration for having
nursed and cared for him for a considerable time prior to his
death, and that the estate was, therefore, indebted to her. Mary
Ann Cox, the other party to the agreement sued on, is not a
party to these proceedings; it was stated by the defendant’s
counsel, during the progress of the trial, that she was not press-
ing her claim.

On the 4th May, 1910, the plaintiff Underwood, who lives in
London, went to the defendant’s residence in the township of
Markham, and, during an interview of considerable length, pro-
posed a settlement. The defendant’s husband, Walter Cox, was

XXVI.]

ONTARIO LAW REPORTS.

305

not present; and Underwood, after stating to the defendant why L^C.

he claimed to be entitled to a settlement, named an amount — _

which would be accepted for the plaintiffs and Mary Ann Cox Underwood
in full, the terms proposed being exactly those which were after- Cox.
wards embodied in the agreement sued upon. The defendant, as Keiiy, j.
was natural, said that she wished to talk it over with her hus-
band; and Underwood left the house with the understanding
that he would return next day for her answer.

On the 5th May, Underwood, accompanied by Joseph Laurie,
husband of the plaintiff Catharine Laurie, returned to the de-
fendant’s house, and had a further interview with the defen-
dant and her husband. The proposal made on the day previous
was fully and freely talked over and considered by those pre-
sent, and the defendant and her husband decided to accept it;
and it was suggested by the defendant ’s husband that the plain-
tiff Underwood draw the agreement to carry out the settlement.

This Underwood refused to do. It was then suggested, and, so
far as the evidence shews, by the defendant, that Underwood,

Walter Cox, and Laurie go to one of the executors, who lived
near by, and have him draw the agreement. They went. The
executor also refused to draw it, and suggested the parties going
to Markham to have it drawn by a solicitor. These same three
persons went together to Markham, a distance of five and a half
miles, and instructions were given to a solicitor to prepare the
agreement, on the terms which had been agreed on at the de-
fendant ’s house, all three being with the solicitor when the
instructions were given.

The plaintiff Underwood and the defendant’s husband re-
turned to the defendant’s house with the agreement, which, on
the way from the solicitor’s office, had been signed by Mary
Ann Cox.

The defendant did not then read the agreement, but she
admits that she understood the proposal for settlement, made
by her brother on the 4th, and discussed by the parties as-
sembled at her house on the 5th. There is no doubt, and the
defendant admits it, that the agreement is in the exact terms
then proposed. Under these circumstances, its not having been
read over at the time of its execution is not a ground for re-

306

D. C.
1912

Underwood

Cox.

Kelly, J.

ONTARIO LAW REPORTS. [vol.

pudiating the agreement: North British B.W. Co. v. Wood
(1891), 18 Ct. of Sess. Cas. (4th series) 27.

The defendant shewed some hesitation about signing, and the
plaintiff Underwood said to her: “Now, Jane, you do not need
to sign that paper, and don’t sign it unless you feel that you are
giving what you feel that I should have; I consider this is a
just claim, and if you don’t consider so, don’t sign that paper.”
And, further, “You don’t have to sign it.”

The defendant’s husband then said, “What will happen if
she don’t sign it?” Underwood replied, “We will let it stand
on its own merits, will let the case stand on its own merits, and
the case will settle itself.”

At the trial it was admitted that there was no duress; and
there was no evidence of it; but it was attempted to be shewn
that there was fraud and misrepresentation on the part of the
plaintiff Underwood, and that he had intimidated the defen-
dant and obtained undue influence over her.

The evidence does not satisfy me that these contentions are
well founded. I do not find that the plaintiff Underwood or
Joseph Laurie made any misrepresentations to or perpetrated
any fraud upon the defendant; nor do I think that any fidu-
ciary relationship, or relationship of confidence, existed or was
established between these parties such as would justify the as-
sumption of undue influence; nor is there any evidence of in-
timidation.

The defendant alleged that she was in a weak state of health,
that she had no independent advice, and that she was unduly
pressed by the plaintiff Underwood, and was hastened into the
settlement.

It is true that she was not then in the best of health, but she
was not so unwell as not to be able to attend to her household
duties, which she was doing unaided at that time, including the
preparation pf dinner for those who assembled at her house on
the 5th May. She was not unduly pressed or hurried into the
settlement. When, on the 4th May, she expressed her desire to
be given until the following day to consult with her husband,
her brother readily consented. She had from some time on the
4th May until the afternoon of the 5th May to confer with her

XXVI.]

ONTARIO LAW REPORTS.

307

husband, and obtain other independent advice, had she desired to
do so; and I do not find that any circumstances arose which
threw the burden on the plaintiffs of doing more than they did.
See Wallis v. Andrews (1869), 16 Gr. 624, at p. 640.

In Harrison v. Guest (1856), 2 Jur. N.S. 911, the Lord
Chancellor held the absence of professional advice no objection,
when the party dealt with did not occupy a fiduciary relation-
ship. It was also there laid down that the burden of proof is
on the party seeking to set aside the transaction to shew that he
has been imposed on, and it is not for him to say, “I had no pro-
fessional advice,” unless he can shew that there has been con-
trivance or management on the part of the person who was
dealing with him, and whose transaction is sought to be set aside,,
to prevent him having that advice.

Nothing has happened in this case to throw that burden on
the plaintiffs.

The defendant endeavoured to shew that the plaintiff Under-
wood had used an incident in her early life as a threat to compel
her to make the settlement. I do not find this to have been the
fact. The defendant’s evidence is, that she did not know if her
brother knew of this incident, that he had never mentioned
it to her, and when she herself mentioned the subject on the 4th
May, she cannot remember his making any reply. Her brother
denies having alluded to it.

It was argued on behalf of the defendant that the filing of
the caveat was not the proper procedure by which Underwood
could establish his claim. He, however, believed that whatever
procedure was adopted by his solicitor in London, who prepared
the caveat, was the necessary procedure by which to establish
his claim.

The settlement was, to my mind, deliberately made ; and the
fact that one party to it afterwards became dissatisfied with it,
is not of itself a sufficient reason for seeking to be relieved from
it. In many instances, compromises or settlements are entered
into which are at the time not altogether satisfactory to one or
other of the parties, but which they, nevertheless, enter into so
as to avoid the expense and anxiety attendant on litigation, or

D. C.
1912

Underwood

Cox.

Kelly, J.

308

D. C.
1912

Underwood

Cox.

Kelly, J.

ONTARIO LAW REPORTS. [vol.

to settle doubtful claims, or for some such consideration, and
the Courts uphold these compromises or settlements.

It is not unusual for a compromise to be effected on the
ground that the party making it has a chance of succeeding in
it ; and, if he Iona fide believes he has a fair chance of success,
he has a reasonable ground for suing, and his forbearance to sue
will constitute a good consideration: Callisher v. Bischoffsheim
(1870), L. R. 5 Q.B. 449; Miles v. New Zealand Alford Estate
Co. (1886), 32 Ch.D. 266.

These plaintiffs not only believed that they had a chance of
success, but there is nothing in the evidence to shew that their
claims were, in their minds, at least, other than honest ones, or
that they were otherwise than honestly made. By the agreement
sued upon, they and Mary Ann Cox, in consideration of the pay-
ment which the defendant agreed to make, released their
father’s estate from all claims which they had against it, and
withdrew, without costs, the caveat.

After a careful consideration of the evidence, I can only
conclude that the plaintiffs are entitled to succeed. There will,
therefore, be judgment in their favour for the amount prayed
for and costs.

The defendant appealed from the judgment of Kelly, J.

April 4. The appeal was heard by a Divisional Court com-
posed of Boyd, C., Latchford and Middleton, JJ.

G. Waldron, for the defendant, argued that the learned trial
Judge erred in the following findings : that the plaintiff Under-
wood did not make any misrepresentation to the defendant ; that
his real ground of objection to the will was in the claim which
he had against his father ’s estate ; that there was no evidence
of intimidation ; that no fiduciary relationship or relationship of
confidence existed between these parties such as would justify
the assumption of undue influence; that the defendant’s health
was not such as to interfere with her power to contract ; that the
absence of professional advice was not objectionable; that the
plaintiff Underwood had not used an incident in the early life
of the defendant as a threat to compel her to make a settlement ;
that the agreement was deliberately made ; that the plaintiffs

XXVI.]

ONTARIO LAW REPORTS.

309

believed they had a fair chance of success. Counsel contended, U. c -

on the contrary, that there was fraud and overreaching on the

part of the plaintiff Underwood; that there was a fiduciary Underwood

relationship or relationship of confidence between the plaintiff cox.
Underwood and the defendant; that there was evidence of in-
timidation; that the plaintiff Underwood did use an incident in
the early life of the defendant as a threat to compel her to make
a settlement ; in fine, that the bargain was not a compromise of
a dispute at all, but a surrender by the defendant through fear
of Underwood’s betrayal of a family secret, and should not be
enforced. The learned trial Judge should have admitted in
evidence a letter written by the plaintiff Underwood from Lon-
don in November, 1911. Though written “ without prejudice,”
it was not a privileged document, because it contained threats,
and was not written for the purpose of a bona fide offer of com-
promise : Kurtz and Co. v. Spence and Sons (1888), 58 L.T.R.

438, at p. 441; Phipson on Evidence, p. 211; Pirie v. Wyld
(1886), 11 O.R. 422. In support of his contentions counsel
also referred to the following authorities: Cadaval v. Collins
(1836), 4 A. & E. 858; Huguenin v. Baseley (1807), 14 Ves. 273,
at p. 287 ; Gordon v. Gordon (1816), 3 Swanst. 400; Hoghton v.

Hogliton (1852), 15 Beav. 278; In re Roberts, [1905] 1 Ch. 704;

Tennent v. Tennents (1870), L.R. 2 Sc. & D. 6-Hartopp v. Har-
topp (1856)., 21 Beav. 259; Ellis v. Barker (1871), L.R. 7 Ch.

104; Boyse v. Bossborough (1856), 6 H.L. C. 2; Allcord v. Skin-
ner (1887), 36 Ch. D. 145, at p. 171; Stapilton v. Stapilton
(1739), 1 Atk. 2; McCaffrey v. McCaffrey (1891), 18 A.R. 599;

Trusts and Guarantee Co. v. Hart (1900), 31 O.R. 414, at p.

420; Gissing v. T. Eaton Co. (1911), 25 O.L.R. 50.

R. TJ. McPherson and J. W. McCullogh, for the plaintiffs,
contended that the learned trial Judge was right in his findings,
and that his judgment should be affirmed. They denied that the
evidence shewed any fraud or overreaching or intimidation, or
that any fiduciary relationship existed ^between the plaintiff
Underwood and the- defendant such as would justify the as-
sumption of undue influence. Therefore, the absence of profes-
sional advice was no objection: Harrison v. Guest, 2 Jur. N.S.

911. The plaintiff Underwood did not use an incident in the

310

ONTARIO LAW REPORTS.

[VOL.

D - C. early life of the defendant as a threat to compel her to make a

1912 settlement. The settlement was deliberately made, and the fact

Underwood that one party afterwards became dissatisfied with it was not

Cox. a sufficient reason of itself to he relieved from it. The bargain
was a fair compromise, as the plaintiffs believed that they had
a fair chance of success : Callisher v. Bischoffsheim, L.R. 5 Q.B.
149; Miles v. New Zealand Alford Estate Co., 32 Ch. D. 266.
The learned trial Judge was right in refusing to admit in evi-
dence the letter of November, 1911, as it was a privileged com-
munication : Kurtz and Co. v. Spence and Sons, 58 L.T.R. 438.

Waldron, in reply.

April 18. Boyd, C. : — This appears to be a nefarious trans-
action, though its real import was obscured at the trial by
reason of the rejection of evidence. Had the letter written by the
plaintiff Underwood to the defendant pendente lite been admitted
and considered by the learned trial Judge, I do not doubt but
that he would have arrived at a conclusion diametrically opposite
to that now under appeal. He was impressed favourably with the
appearance of the plaintiff Underwood, but his own letter shews
to what unworthy means he will stoop to serve his own ends.
The dispute falls to be decided (as I take it) mainly, if not
entirely, on what occurred during the firs! interview of one
hour between brother and sister (the said parties) on the 4th
May, 1910, when he made the claim which was afterwards
given legal effect to by the writing under seal which is the foun-
dation of this suit. But to understand the situation it is needful
to refer to what is in evidence and to the prior sequence of
events.

The first group relates to the plaintiff Underwood’s claim
of unfair treatment by his father. This claim, vague at best,
looms up more largely at the trial than elsewhere. It was
not known by or* disclosed to the defendant; and, even
now, it is difficult to find out coherently any claim from the
evidence. But, so far as it has substance, the situation is
and it rests entirely on the recollection and good faith
credibility of the plaintiff Underwood — with no scrap of wr
to assist, but all the writings making against him.

XXVI. ]

ONTARIO LAW REPORTS.

311

The lot named in the will, N. part of lot 18 (fifty acres) in D - c -

the 4th of Scarborough, was, the plaintiff Underwood says,

originally owned by his mother. She died in 1885, without a Undebwooh
will, leaving the father, this son, and four sisters, of whom the Cox.
youngest, the defendant, Jane, was under age. It is said that Boyd> c
the mother intended that the son should get this lot, and it is
said that the father got the sisters to sign off their claims, with-
out consideration, in favour of the plaintiff Underwood. It is
said that the plaintiff mortgaged for $500, with which money he
went into business, without much success apparently. Then
the father asked the son to sell him the lot, and the son wanted
for his interest therein $3,500, hut the father would give no
more than $2,000, and this the son took, on the father saying
that the son would get a share with the rest of them when he
divided — this being taken to mean, “when he died.” The son
contradicts himself as to whether the father paid $2,000 and
assumed the mortgage for $500, or whether the mortgage was
to be paid out of the $2,000. This occurred in 1888. This man-
ner of claim was not explained to the sister when the alleged
settlement took place in 1910. He gives it in his evidence in
chief thus: “I said I felt I had not got from the estate what I
should have got, that my father had not left me what I was
promised, what I felt I should have; she said she had nothing
to do with that part of it as to what I got or should have got.”

“Then I asked her, in view of the circumstances, her knowing
how the property was made and got together, and how I stayed
at home till I was twenty-three, I felt it was due her to make
good the money, as she was evidently the only beneficiary under
the will, that I should have a certain amount and that Mary
Ann and Catharine should have something.”

To follow the history of this lot after the son conveyed to the
father. In 1902, the father called upon Mr. Holmes to draw
the papers conveying this lot to his daughter Jane and her
husband, Walter Cox, and to draw a mortgage, on the 26th
July, 1902, for $1,000, upon the lot, from the Coxes, payable to
the father at the end of fourteen years, with interest at two and
a half per cent. This was subject to a first mortgage from the
father to George Morgan (probably an executor) for $1,500.

312

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[VOL.

D. C.
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Cox.

Boyd, C.

Mr. Holmes says that the mortgage was drawn expressly for the
purpose of being left to the child (Ida Prances). According to
the statement of the plaintiff Underwood, this farm was worth
about $5,000, and they were to give $4,750 for it; of which
$1,500 was paid by the defendant. There was also the mortgage
for $1,000 ; and, if it was subject to another mortgage for $1,500,
that would total $4,000. And the plaintiff omits to tell that his
sister Jane relinquished her share in the lot originally when it
was conveyed to the plaintiff — worth several hundred dollars.
The rest of the sisters got $2,500 each from the father during
his life.

The next group relates to the will of the father.

The father died at the home of the plaintiff Catharine
Laurie, on the 27th March, 1910. His will weis made on the 2nd
August, 1902, pursuant to instructions given to the well-known
lawyer Mr. Holmes, who drew it and was one of the subscribing
witnesses. He gives to his daughter Mary Ann Cox and her
husband the north half of lot 19 in the 4th of Scarborough, being
100 acres. To his daughter Fanny Newell, a small lot contain-
ing one-eighth of an acre alongside the north fifty acres of lot
18, conveyed to Jane and her husband. To Prances Cox,
daughter of his daughter Jane, he gives the organ and also the
mortgage for $1,000 made by his daughter Jane to the testator,
and drawn less than a week before the will.

Nothing is given to his son Richard and daughter Catharine,
as he had advanced them a sufficient portion (the plaintiff Un-
derwood’s name is not mentioned), and the residue of the estate
goes to Jane Cox.

There was a codicil to this, drawn after it because of the
death of Fanny Newell on the 1st March, 1905, when the testa-
tor was living with his daughter Catharine, whereby the small
lot of one-eighth of an acre was given to his daughter Jane,
the defendant. This codicil was drawn by Mr. Holmes’s partner,
Mr. Gregory, and by him also witnessed. The defendant was
too ill to attend the funeral, but the plaintiff Underwood was
there, and then found out from the Lauries that a will had been
made. The matter was talked over with the. sister Catharine,
and they were disturbed about the way the property was left,

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•and about Ida the little girl securing the mortgage for $1,000. D - c -

1912

The plaintiff bespoke a copy of the will, and returned to his home

at London. He writes a letter on the 24th April, 1910, to the Underwood

executor George Morgan urging the forthcoming of a copy of the Cox.
will, in which he says : 4 ‘ All the information I have is from the BoydTa
Lauries to the effect the youngest girl (i.e., defendant) in the
family and her daughter comes in for the entire estate. And it
is my opinion (sic) to go thoroughly into the matter before
allowing the matter to be settled.”

The plaintiff repairs to Mr. Beattie, solicitor in London,
and procures the filing of a caveat on the 26th April, 1910, on
behalf of the plaintiff and the two sisters Mary and Catharine.

It is not clear what he told this solicitor as to the grounds of
attack ; at p. 122 of the evidence he says : ‘ ‘ One of the grounds was
his own promise before a witness that I was to have a share in the
estate.” And there is this further from his examination for
discovery: “Q. And your solicitor did not think that would be
a ground for setting aside the will? A. I do not think I asked
him that. I thought possibly that would be a ground for setting
aside the will ... I 'did not go into the question of my rea-
sons for the caveat to J ane. ’ 9 However, the caveat does set forth
as grounds that the alleged will was not executed by the testator,
or, if executed, it was so by means of duress and undue influence
exercised over him, and that he was not of sound mind, memory,
and understanding. The plaintiff says the caveat was filed
because “he felt that he had not got what he felt was just out
of the estate.”

A warning was given on behalf of the executors on the 27th
April that the contestant was to appear within ten days after
service, failing which the Court would proceed in the pre-
mises: that would allow him till the end of the first week in
May to act. Accordingly, on the 3rd May he visited Mr. Gre-
gory, solicitor for the executors, and the caveat was discussed
and the will, and he asked information, speaking something of
the father and saying the will was not fair. Mr. Gregory in-
formed him that there was no doubt about the validity of the
will or codicil or of the capacity of the testator. He and his
partner Mr. Holmes had known the testator well for years, and

314

D. C.
1912

Underwood

Cox.

Boyd, C.

ONTARIO LAW REPORTS. [vol.

the plaintiff admits that he was told emphatically that there
was no cause for breaking the will.

The plaintiff had visited his father in 1909, and found him
robust and strong-minded, and that was his last visit.

These are the facts, which shew a perfectly hopeless case for
attacking the disposition of property made by the testator, either
on the grounds set forth in the caveat or upon the vague oral
intimation alleged to be given by the testator, a quarter of a
century before his death, that he would leave the son something
by will. How then does it come that the defendant appeared
willing to settle the plaintiffs’ claims by paying $1,400? It is
to be noted that Mary makes no claim on the estate and takes
no part in this litigation ; and, further, that the alleged claim of
Catharine for nursing was not in any way referred to before
the defendant, it being supposed and believed that she (Catha-
rine) had been paid by the testator all that he had promised to
pay her — at so much per week. This apparent family compro-
mise turns out to be really a surrender by the defendant, at the
bidding of the plaintiff, because of his knowledge and use of a
family secret. That secret may be revealed by the use of the

plaintiff’s own words in the letter dated “Nov. , 1911,”

written to the defendant after he had been examined for dis-
covery in this action: —

“I am going to use what evidence I can get to shew that I
had good reasons to enter a caveat against the will. . . .

You know that my father was induced to make his will in the
way he did just because of that child that Walter declared did
not belong to him, and my father told us when he lived with us
in Uxbridge that the child did not belong to Walter, and did
not look like him, and went so far as to hint pretty loudly who
it did belong to, and there are others in Scarborough who will
be brought to tell what they know.

“You will remember that I was in Scarborough that day
that Walter laid drunk on the side of the road after being up
at Markham, and threatened to leave you, and you know his
reasons, and he told them to some others in Scarborough. . . .
A ll I want is my rights. ’ ’

This precious epistle was enclosed in an envelope and

XXVI. ]

ONTARIO LAW REPORTS.

315

addressed to Mrs. Jane Cox, and marked “personal,” with a D - c -

double injunction, marked on the envelope and written again on

a strip of paper, to the post master, “Please see that the enclosed Underwood
letter is given to no one else but to Mrs. Dox,” and the whole cox.
put into an envelope addressed to the post master at Malvern. B ^Tc
This outside envelope is stamped as of the 24th November at
Malvern, and as of the 25th November at London, where it was
posted. This letter begins “Dear Sister Jane” and ends
“Your Bro. Will,” and has at its opening “Without prejudice
The plaintiff has some knowledge of the niceties of law, such as
that he should not draw an instrument of which he gets the
benefit, and he doubtless thought that this would he a secret
» missive not to be revealed or used against him in Court. And
he hoped, no doubt, that it would work no less efficaciously in
writing than if given by hint or word of mouth. But the !
authorities shew that this kind of letter, containing threats not
written for the purpose of a bond fide offer of compromise, is not
within the category of privileged documents.

On grounds of public policy, letters written without pre-
judice and written bond fide to induce the settlement of litiga-
tion, are not to be used against the party sending them. But,
when the letter embodies threats if the offer be not accepted, it >
is in the interests of justice that such tactics should be exposed,
and no privilege protects : Kurtz and Co. v. Spence and Sons,

58 L.T.R. 438, 441; Phipson on Evidence, p. 211; Pirie v. Wyld,

11 O.R. 422.

A critical point in the case was reached at the beginning of
the cross-examination of the plaintiff. I quote : ‘ 1 You said you
never made any threats to this woman? A. I never made any
threats. Q. You did not make any threats on the 4th or 5th
May? A. Oh, no. Q. Or on any other occasion? A. Threats —
no, sir.” Then counsel calls for the letter, but further question-
ing is frustrated by the ruling that it was not admissible. Now
this letter, when looked at and read on this appeal, is fatal to the
plaintiffs’ success. The trial Judge, believing the answers made
by the plaintiff Underwood, gives judgment in the plaintiffs’
favour. But this letter is full of threat and menace of the basest
kind ; and so his answers must be discredited, for this letter dis-

316

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D. C.
1912

Underwood

Cox.
Boyd, C.

closes his threats, and therein stamps him as untruthful, and its
contents reveal that he is also unscrupulous.

Leaving Mr. Gregory on the 3rd May, the plaintiff paid his
visit to the defendant — and this visiting her was a new thing
that had not happened before — on Wednesday the 4th May,
1910. She had heard nothing about the will from the plain-
tiff or her sisters, but it appears that the solicitor of the execu-
tors, Mr. Gregory, had, with the executor Morgan, called on
her in the early part of April to see about the details of the
estate with a view to obtaining probate. The affidavit of the
other executor, Wyper, as to value, was made on the 20th
April. Mr. Gregory says that he found her at the time of his
visit in a “very frail condition. ” She had been married about
thirteen years, and had children other than the one who takes
under the will the mortgage intended for her by the testator —
her grandfather — notwithstanding and perhaps because of his
knowledge of the stigma which attached to her birth. The plain-
tiff, being asked, identified her thus: “Q. And that is the girl
that was born as the result of something being up with the
mother? A. That is the girl.” The allusion is to the expression
used by the mother in giving the scraps which she was able
to recollect of this private one hour’s interview with her brother
on the 4th May. I quote : ‘ ‘ He told me he had stopped the busi-
ness. . . . He said that I knew why my little girl got the

money left to her (i.e., the $1,000 mortgage). I said, 'Was it
because there was something up with me when I was married ? ’ ”
At this stage of the examination and often afterwards she
failed to remember what he said as to that and to other matters
germane to it. No one can tell the strain put upon her by the
exposure in public Court: she felt tired and faint, and finally
collapsed, and the 'Court adjourned early. It is to be regretted
that, on the resumption of the case next morning, she had not
been asked to put in writing in Court what she remembered, but
this was not done, and she was overwhelmed with varied ques-
tions, which, far from helping, only hindered and embarrassed
her. On the other hand, the plaintiff answered evasively and
‘ ‘ hedged ’ ’ on the different occasions when his cross-examination
was nearing this critical point. As a short sample I put in a

XXVI.]

ONTARIO LAW REPORTS.

317

page which exemplifies his manner of answering while being
examined for discovery: —

127. Q. You did not tell her the grounds upon which you
were going to break the will if she did not give in now ? A. No

128. Q. You told her that you were going to fight it? A. Yes.

130. Q. You know the history of the little girl? A. Of the
granddaughter ?

131. Q. Yes, of your niece? A. I know partly the history
of it.

D. C.
1912

Underwood

Cox.

Boyd, C.

132. Q. Say yes or no ? A. If I could tell how children come
in every family, I could tell you ;• I know the child was born.

133. Q. Did you make use of that in talking with your poor,
feeble, consumptive sister? A. She is not consumptive.

134. Q. Weak lunged; did you make use of that? A. Her
name was mentioned as receiving a thousand dollars, which she
should not have. I made use of it in that way, that she got a
thousand dollars that the rest of the family should have, I did
make use of that.

135. Q. Did you talk with poor Jane about what would
happen if you smashed this will which your father had made?
A. What would happen?

136. Q. How the property would go if you smashed the
will? A. I guess I did.

137. Q. What did you tell her? A. If the will was broken,
then we would share and share alike — I think that is what I
told her.

138. Q. Did you tell her that your proposition was a little
better for you and Mary Ann and Catharine than that? A. I
do not think so, because it would not have been.

140. Q. Did you say what would happen to the little girl if
the will was broken? A. That that thousand dollars which she
was to get would go to the rest of us, yes.

141. Q. Did you play upon the mother’s timid horror of
publicity? A. I do not think so.

142. Q. Did you play upon the fear of the woman who has
made a mis-step and who was your own sister ? A. Only as I
am mentioning here.

22 — XXVI. O.L.R.

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VOL.

D. C.
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Underwood

Cox.

Boyd, C.

No one can read the plaintiff’s evidence (with the light re-
flected from this letter) and fail to see that the man knew how
to touch the sore sport in his sister’s past life.

No one who reads the defendant’s evidence (with the light
so reflected) can fail to see the cause of her mental disturbance,
her distress of mind. She could not collect her senses : she failed
to recollect, and that at many critical points, when, if she were
an untruthful witness, it would have been simple and easy for
her to fabricate favourable responses.

Consider the parties pitted against each other, in the absence
of the husband and children and in the seclusion of the farm-
house : he suing as a book-keeper, but giving evidence as an “ in-
surance-solicitor, ’ ’ whose business it was to persuade people, and
who had the adroitness and resourcefulness and assurance pos-
sessed by a shrewd man in that line of business. 'She, the young-
est of the family, in frail health (as he admits), nervous, with-
out knowledge of affairs, and without advice — burdened, more-
over, with a secret, condoned after thirteen years of married
life, but now likely to be revealed in all the publicity of an open
Court. He takes out a copy of the will and reads it to her: he
says he has authority to come down and break the will, and that
she had to get on her knees because there was going to be a big
storm. Confronted with the last statement, all that the plaintiff
can say is, “To the best of my recollection and knowledge I said
no such thing.”

Again he said (with reference to the farm willed to Mary,
which the testator before his death sold and conveyed to her),
“The selling of the farm to Mary Ann could break the will.”
This statement is not contradicted by the plaintiff.

Again he said, “If the will was broken, I would lose every-
thing, and my sisters would come in for the money that was
left to me (i.e. the residue), and my little child would lose hers
. . . lie said he had stopped the business. ... I did not

know what a caveat was.” To stay all this turmoil and ex-
posure, she was to give up the money in the bank (which turned
out to be about $760) and to pay $700 besides.

This because, as he said in his letter to Morgan, she and the
girl get the entire estate. What was the entire estate given by

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ONTARIO LAW REPORTS.

319

the will ? As valued by the affidavit of the executor Wyper, as

follows : —

Household goods and furniture $ 10.00

Mortgage to child (to be paid by Mrs. Cox) . . 1,000.00
Cash in bank (reduced by expenses to $750) . 1,000.00
The small lot to Mrs. Cox, value 400.00

D. C.
1912

Underwood

Cox.
Boyd, C.

$2,410.00

The plaintiff makes grave complaint of the “ organ” being
given to the child : an old organ, bought, as is proved, by his
mother, and, like the land (as he says), intended for him. The
mother died in 1885, and the organ of that age was included in
the valuation at $10. The woman appears, therefore, to have
been willing to strip herself of all she gets from her father, i.e.,
$700 in bank and $400 in lot, and give $300 more, to save the
mortgage for her little girl and save both of them from public
shame.

It is necessary, perhaps, to say a little more of what took
place after the 4th May. The plaintiff permitted her to talk it
over with her husband that night, and he would return in the
morning. I suppose the wife communicated the proposition and
her misery in some way to her husband (what passed was not
and could not be given in evidence) ; but, at all events, the effect
on the man was simply stupefying. He is, I judge, a slow-
witted man : if not exactly stupid, certainly not one to be looked
to in an emergency. The plaintiff agrees that any conference
between the two would not much help either of them. He is
asked : “ Of course they did not contribute much to each other ’s
wisdom ? A. I cannot help that ... I done the best I could. ’ ’
That is, I think, true. He did the best he could for him-
self. Walter Cox, when examined, appeared to be all at sea:
he says: “My wife got worried over it, and it got me
rattled . . . my wife was so much worked up about it and

nervous that it got me rattled, and I would not talk to the plain-
tiff.” “My mind was in a queer state that day” (5th May).
“I spoke in the house of getting some advice before she signed
and before going to Wyper ’s (the executor). . . I did not

think of advice at Wilson’s (who drew the agreement) ; it was

320

ONTARIO LAW REPORTS.

[VOL.

D. C.
]912

Underwood

Cox.

Boyd, C.

too far gone : he had ns heat. I was beat completely. My idea
was when I spoke abont getting advice, I wanted to come to
Toronto, but he said he had not time — to-morrow was the last
day to act. . . . Neither my wife nor I said at our house that
we would give what the plaintiff asked. ’ 5 They both contradict,
in this, the statement of the plaintiff as to their having given
audible assent. “I was not thinking of giving the money in
Wilson’s office, for I was bothered quite a bit.” He also affirms
what his wife says, that the plaintiff told them he had authority
to break the will, and, if it was broken, we would lose the money,
and the girl would lose the $1,000.

Walter says when the paper was laid before his wife to sign
he said, “Hold on, not to sign. I wanted him to leave the paper
with me and I would mail it to the lawyers ... he would
not do that: then I said, ‘Well, go ahead and sign.’ ”

I may note in passing that the plaintiff appears to have had
complete influence over his sister Mary: she was not privy to
this arrangement, and in returning from the draftsman’s office
the instrument was taken to Mary’s house, who was to sign first,
and the plaintiff said: “I wonder if she will be satisfied with
the agreement : if not she will have to sign. ’ ’ She did sign, but
it is said that she has renounced any claim. The other, Cath-
arine, did not appear, nor was she examined as a witness. Of
course, whatever claim she may have for nursing will not be
affected by the dismissal of this action. She may still proceed
against the estate or the recipients of it.

Neither husband nor wife knew anything about law: the talk
of a caveat would only mystify them, and the plaintiff’s pro-
testations of his authority to break the will, and the effect on
the will of part of the land having been sold, would only tend
further to mislead them. It was eminently a case calling for
competent advice, but any attempt to seek this was checked by
the peremptory veto of the plaintiff — in effect presenting the
filing of the caveat and the purpose of the warning given him as
to entering an appearance, to hurry matters to a close while yet
the defendant was under the shock of his demand and fear of
the consequences which would follow its refusal.

When the plaintiff was asked if he was not an overmatch

XXVI.]

ONTARIO LAW REPORTS.

321

for husband and wife, he replies with his usual indirectness, D - c -

1912

“Not necessarily.”

I cannot doubt that the woman was overmatched, overborne, P NDE ^ W00D
and overreached by her shrewd brother. Prom the moment of 'Cox.
seeing her, he kept her in hand till the paper was signed on the Boyd, c.
5th May. He knew that the husband ’s advice would rather con-
fuse than help her, and he resolutely refused any opportunity
for them to get independent assistance. When they did get such
assistance, the result was a letter, dated the 14th May, in which
the instrument sued upon is repudiated, and the reasons given
for its repudiation.

There is another aspect of the plaintiff ’s evidence that I may
briefly advert to. He is asked: “Why do you object to the little
girl getting the money? A. She had no claim to it, she had no
right to it, Q. How do you mean no claim to it ? A. No right to
it: no moral right whatever . . . the little girl had no legal

right to the money : he left her money that should have been left
to us: I made her understand that,” We can read into this
the method by which the brother made her understand that that
little girl had no legal or moral claim on the testator or to the
money. It is worth while, also, to give his answers to the appli-
cation for delay and to get advice: “Q. Why did you not let this
woman and her husband have three or four days to go and con-
sult their solicitor? A. I could not. Q. Why? A. They had
from Wednesday, Wednesday night I went there, and they
had from ( ?to) Thursday morning. Q. Why did you not let
them go? A. I was not asked.” The defendant gives the rea-
son which the plaintiff gave for refusing them time to get advice.
It was this, “that he had just till to-morrow to act.” And the
husband says the same thing: “The plaintiff said he had not
time; to-morrow was his last day to act. I did not know what
he meant.”

I have gone over the main turning point and the subsidiary
ones on which the judgment should turn. Everything else in
the way of detail is of little moment. There was the going to
the executor Wyper to see if he would draw the paper. He
moralised that it was a good thing parties could agree together,
and passed them on to a lawyer. Mr. Wilson simply put the

322

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D. C.
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Underwood

Cox.

Boyd, C.

thing into legal shape according to what Underwood told him,
and all this was in the absence of the wife. She had no one but
her husband, who was baffled in his attempt, and gave it up.
No doubt, she was able to go about the house and attend to
domestic routine, getting dinner ready and the like, but that is
really no more to the point than to suggest that, because the
brother kissed her as he left on the evening of the 4th May, he
had the most fraternal regard for her, and that she recipro-
cated his friendship.

The plaintiff had no belief in his flimsy claims upon his
father or upon his estate or in respect to the validity of the
will: his whole action indicates a scheme to put money in his
pocket (by hook or by crook) at the expense of his sister.

The judgment should be vacated and the action dismissed,
with all costs below and in appeal to be paid by the plaintiffs.

Latchford, J. : — I agree in the result.

Middleton, J. : — Upon the facts, there seems to me only one
conclusion possible. The bargain itself and all the surrounding
circumstances shew that there must have been fraud or over-
reaching on the part of the plaintiff. There was mental inequal-
ity between the contracting parties, and the stronger was pos-
sessed of a weapon which he did not scruple to use in his
attack upon the weaker. Therefore, to me at least, it seems plain
that the transaction cannot stand.

When it is made to appear that the bargain was not a fair
compromise of a real dispute, but a complete surrender to a
groundless attack, suspicion is at once aroused; and when the
plaintiff is revealed — not only by his letter, but by his evidence —
as cruel and unscrupulous, and as a man ready to use an inci-
dent in his sister’s life for his own financial advantage, and
reckless enough to attempt to cause the sister to abandon her
defence to this action by the use of the same threat — and cun-
ning enough, with his superficial smattering of legal knowledge,
to think that he could conceal this last attempt by the use of
the words “ without prejudice” — I am compelled to the con-
clusion arrived at by my Lord the Chancellor, that the contract
sued upon is in truth a “nefarious transaction.”

XXVI.]

ONTARIO LAW REPORTS.

323

The true function and office of the words “without pre-
judice” is well defined in Pirie v. Wyld, 11 O.R. 422, where it is
said that “all communications expressed to be written without
prejudice, and fairly made for the purpose of expressing the
writer’s views on the matter of litigation or dispute, as well as
overtures for settlement or compromise, and which are not
made with some other object in view and wrong motives, are not
admissible in evidence.”

This rule, founded on public policy, cannot be used as a cloak
to cover and protect a communication such as the letter in ques-
tion, which contains no offer of compromise, but a dishonourable
threat.

Appeal allowed.

D. C.
1912

Underwood

Cox.

Middleton, J.

[DIVISIONAL COURT.]

PUKULSKI V. JARDINE. D. C.

Perryman v. Jardine. 19 12

Company — Liability of Directors for Wages of Servants — Action under On- April 25.
tario Companies Act, sec. 94 — Execution against Company — Return by
Sheriff — Statutory Requirements — Return Made after Winding-up
Order — u Proceeding” against Company — Dominion Winding-up Act,
sec. 22 — Proof of Status of Defendants as Directors — Travelling Ex-
penses of Servants — Costs of Second Writ of Execution.

The plaintiffs, who were servants of a mining company, recovered judg-
ments against the company for wages, and placed writs of execution in
the hands of the Sheriffs of two counties, that wherein the company’s
head office was situated, and that wherein the company’s operations were
carried on. After this, an order was made for the winding-up of the
company under the Dominion Winding-up Act, R.S.C. 1906, ch. 144, and
after that order the Sheriffs made returns of the writs nulla bona ; and
thereupon the plaintiffs brought these actions against the directors of
the company under sec. 94 of the Ontario Companies Act, 7 Edw. VII.
ch. 34: —

Held, that to comply with this section it was sufficient that the execution
should be placed in the hands of the Sheriff of the county in which the
head office of the company was situated; and, upon the facts, the return
to the execution so issued was not a mere- colourable and illusory return,
but a return after due diligence to realise the amount out of the effects
of the company.

Brice v. Munro (1885), 12 A.R. 453, Jenkins v. Wiloock (1862), 11 C.P.

505, and Moore v. Kirkland (1856), 5 C.P. 452, followed.

Grills v. Farah (1910), 21 O.L.R. 457, distinguished.

2. That sec. 22 of the Winding-up Act, RjS.C. 1906, ch. 144, providing
that, “after the winding-up order is made, no suit, action or other pro-
ceeding shall be proceeded with or commenced against the company,” did
not prevent the making of the return after the winding-up order.

3. That the plaintiffs had given sufficient proof that the defendants were
directors of the company.

4. That an allowance for travelling expenses is within the terms of sec. 94.

5. That the plaintiffs were not entitled to recover against the defendants
the costs of the second writs of execution.

Judgment of Denton, Co. C.J., affirmed.

324

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D. C.
1912

PUKULSKI

Jardine.

[VOL.

Appeals by the defendants and cross-appeals by the plain-
tiffs from judgments of Denton, Jun. Co. C.J., in actions in the
County Court of the County of York.

The actions were brought against the defendants, as directors
of the Boyd-Gordon Mining Company Limited, to recover the
amounts of unsatisfied judgments obtained by the plaintiffs
against the company for wages, in enforcement of the right
given by sec. 94 of the Ontario Companies Act, 1907 (7 Edw.
VII. ch. 34).

The judgments appealed from were in favour of the plain-
tiffs, except as to the costs of a second writ of execution, which
were disallowed. The cross-appeals were from this disallowance.

April 2. The appeals and cross-appeals were heard by a
Divisional Court, composed of Boyd, C., Latchford and Mid-
dleton, JJ.

E. B. Ryckman, K.C., for the defendants argued that the
actions, being brought under the statute, must be confined
strictly within its limits, and submitted that, as the effect of
the order, under the Winding-up Act, was to stay all proceedings
against the company, the plaintiffs must fail, the order having
been made before the executions against the company were re-
turned. The return must speak from the date when it was made ;
and on the 20th October, 1911, when the return was made to the
Pukulski writ, the goods were in the custody of the law :
Churchill’s Law of Sheriffs, 2nd ed., p. 347. The return of
nulla bona to the writ was improper, as there were goods, and
the return should have stated the circumstances : Wright v.
Lainson (1837), 2 M. & W. 739; Warmoll v. Young (1826), 5
B. & C. 660; Grills v. Farah (1910), 21 O.L.R. 457. If it were
possible to make. a return at all, it should have been a special
one ; but, after the winding-up order, the Sheriff was not in a
position to take any step whatever, even to make a return, as that
would be "proceeding with a proceeding” within the meaning
of sec. 22 of the Winding-up Act, R.S.C. 1906, eh. 144. The
directors 'are still officers of the company, and as guarantors in
respect of wages are only liable after the company has failed to
pay. Nor has it been proved that the defendants are directors.

XXVI.]

ONTARIO LAW REPORTS.

325

This is not proved by the Government return of December, 1910 ; D. Ct

and the minute-book produced is not evidence under sec. 119 of

the Companies Act. In any case, that part of the claim which is Pukulski

, c,

for travelling expenses and board should be disallowed. Jardine.

J. P. MacGregor, for the plaintiffs, argued that the books
kept under sec. 113 of the Companies Act were sufficient primd
facie evidence that the defendants were directors of the com-
pany, and the onus was on them to shew that they had ceased
to be so. As to the return by the Sheriff, he referred to Brice v.

Munro (1885), 12 A.R. 453, per Hagarty, C.J.O., at p. 464. The
evidence shews that reasonable efforts were made by the Sheriff
to find assets, and that his return was justified by the facts.

Grills v. Farah is a quite different case from the present, as the
action was under different provisions from those here in ques-
tion. The following cases were also referred to : Gyfford v.

Woodgate (1809), 11 East 297, cited in Avril v. Mordant (1834),

3 L.J.N.S. K.B. 148; Goubot v. Be Group (1833), 1 C. & M.

772. The costs of both executions should have been allowed.

Ryckman, in reply.

April 25. Boyd, C. : — The liability of the directors of a com-
pany to pay one year ’s wages of the labourers and servants there-
of for services performed while they were directors, requires as a
preliminary requisite that an execution against the company is to
be returned unsatisfied in whole or in part. This is the same
form of words which has frequently been the subject of judicial
exposition in various company Acts in respect to creditors and
shareholders, e.g., the Railway Act, CjS.'C. 1859, ch. 66, sec. 80.

The conclusion not now to be controverted is, that it is
enough to satisfy the statute if a bond fide attempt has been
made to collect the amount of the judgment from the company,
and that a bond fide return has been made that there is nothing
in the shape of assets of the company to satisfy it: Brice v.

Munro, 12 A.R. 453, at pp. 464 and 468.

It is also sufficient if the writ of execution be directed to the
Sheriff of the county where the venue is laid, or the county
where the head office of the company is situated, and it be duly
returned by him that the company has not any goods or chattels
in his bailiwick: Nixon v. Brownlow (1856), 1 H. & N. 405;

326

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[VOL.

D. C.
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PUKULSKI

Jardine.
Boyd, C.

Jenkins v. Wilcock (1862), 11 C.P. 505. The writ having been
issued to the Sheriff, he is bound to return it, and it is not shewn
that the return in this case is untrue. On the contrary, it ap-
pears that he has done all that the law requires. As expressed
by Willes, J., in Ilfracombe R.W. Co. v. Devon and Somerset
R.W. Co. (1866), L.R. 2 C.P. 15, it must be shewn that “ reason-
able efforts have been made to discover property of the com-
pany which could be made available to satisfy the judgment,’ *
and this has been affirmatively established. The proceedings
(prior to the date when the winding-up of the company began)
upon the execution were neither formal, illusory, nor fraudu-
lent, and were taken for the purposes of, if possible, obtaining
satisfaction of the judgment, and not merely to give colour to the
statutory action against the directors. The writ was returned
unsatisfied because no effects could be found available to the
plaintiffs under it. The tests suggested by Moore v. Kirkland
(1856), 5 C.P. 452, and Jenkins v. Wilcock , already cited, have
been complied with, and in this essential point the case is very
different from Grills v. Farah, 21 O.L.R. 457, where a merely
formal return of nulla bona was directed and procured by the
plaintiff himself.

The winding-up order effectually removes any possible
assets, whether goods or lands, from the operation of an execu-
tion, but it does not otherwise interfere with the right of
the plaintiffs to proceed against the directors for the recovery
of the claims which could not be levied out of any discoverable
goods or chattels up to the time of the return.

The remedy of servants by way of preferential claims under
the Winding-up Act is limited to three months’ wages (R.S.C.
1906, ch. 144, sec. 70) ; but they are not obliged to look to or
wait for some possible relief to this extent under the Dominion
statute: they may well resort to the more favourable provisions
of the Ontario enactment: Mackenzie v. Sligo and Shannon R.W.
Co. (1854), 4 E. & B. 120, and Palmer v. Justice Assurance
Society (1856), 6 E. & B. 1015.

It is argued that the prohibitions of the Winding-up Act
forbid the acts of the Sheriff in making his return of what he
had previously done, because of the winding-up order of the

ONTARIO LAW REPORTS.

327

XXVI.]

29th September, 1911 — his return being dated the 19th October,
1911. The writ issued and was received by the Sheriff on the
12th September; he could discover nothing to be seized up to
the 29th September; and this is the information which is com-
municated by his return. That return is not a proceeding
against the insolvent company, within the meaning of the Act.

Sections 22 and 23 are to be read together to ascertain their
true scope. Section 22 enacts that, “ after the winding-up
order is made, no suit, action or other proceeding shall be pro-
ceeded with or commenced against the company, except with
the leave of the Court and subject to such terms as the Court
imposes. ’ ’ Section 23 is : “ Every attachment, sequestration, dis-
tress or execution put in force against the estate or effects of the
company after the making of the winding-up order shall be
void.”

The former section is evidently to apply to proceedings
prior to and with a view to some judgment, and does not relate
to “executions,” which are named in the next section: and this
section relates to things to be enforced against property, such
as ‘ 1 executions ’ ’ and the like, of a final, and ‘ ‘ distress ’ ’ and the
like, of a preliminary nature. It relates, however, to these be-
ing “put in force” against the property of the company. This
Sheriff’s “return” of the execution is merely an intimation that
it has not been and cannot be “put in force,” and that it is and
has proved to be abortive. It is not within the mischief to be
avoided, and not within the language of the Act.

Apart from these two main contentions, others were urged
before us which my brother Middleton has dealt with and dis-
posed of, and I need not go over the same ground, as I agree
with his conclusions.

The judgment is right and should be affirmed, with costs in
both cases.

Middleton, J. : — These actions were brought by workmen
against the defendants as directors of the Boyd-Gordon Min-
ing Company Limited, under sec. 94 of the Ontario Companies
Act. This section is as follows : ‘ ‘ The directors of the company
shall be jointly and severally liable to the labourers, servants,

D. C.
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Jardine.
Boyd, C.

328

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Middleton, J.

[VOL.

and apprentices thereof for all debts not exceeding one year’s
wages due for services performed for the company while they
are such directors respectively; but no director shall be liable
to an action therefor, unless the company has been sued therefor
within one year after the debt became due, nor unless such
director is sued therefor within one year from the time when he
ceased to be such director, nor before an execution against the
company has been returned unsatisfied in whole or in part; and
the amount due on such execution shall be the amount recover-
able with costs against the directors.”

Apart from some minor matters, the main contention of the
defendants is based upon the fact that, before the executions
against the company were returned, a winding-up order under
the Dominion Act had been pronounced. It is said that the
effect of this order was to stay all proceedings against the com-
pany, and that, therefore, the returns to the executions made
after the winding-up are null and void.

The question so raised is of importance, as, if the defendants’
argument is well founded, the effect of the winding-up order
is materially to diminish the right of wage-earners and the
liability of directors; because, under the Ontario statute, the
directors are liable to the extent of one year’s wages, while,
under the Dominion Winding-up Act, the wage-earner is en-
titled only to a preference for his unpaid wages not exceeding
the arrears which have accrued during the three months next
previous to the date of the winding-up order: R.S.C. 1906, ch.
144, sec. 70. The question is also of importance because, in
many cases, the entire assets of the company in liquidation are
taken by debenture-holders ; and, if the contention is well
founded, the directors, by reason of the winding-up order, may
altogether escape this statutory liability.

Before considering the validity of this argument and the
other questions raised, it is desirable to set out the facts proved
at the trial, at length.

The Boyd^G-ordon Mining Company has its head office at
Toronto. It conducted mining operations in the district of
Nipissing. On the 11th September, 1911, Pukulski recovered
judgment against the company for $157.06, wages earned during

XXVI.]

ONTARIO LAW REPORTS.

329

the months of June, July, and August, 1911, and $22.04 taxed
costs, in addition to the costs of execution. Upon the same day
writs of execution against goods and lands were issued to the
Sheriff of Toronto, and on the following day these were placed
in the hands of the Sheriff for execution. Contemporaneously,
an execution was issued directed to the Sheriff of Nipissing.
This was placed in the hands of that Sheriff on the 15th Sep-
tember.

On the 16th September, the company made an assignment
for the benefit of its creditors; and on the 29th September an
order was made for the winding-up of the company under the
Dominion Act.

In order that the conditions precedent prescribed by the
statute might be complied with, the plaintiffs ’ solicitor requested
the Sheriffs to return these writs of execution, and they were
respectively returned unsatisfied. The endorsement upon the
writ to the 'Sheriff of Toronto was: “Nulla bona. The answer
of Fred. Mowat, Sheriff.” The return upon the Nipissing writ
was: “ Returned unsatisfied. H. Varin, Sheriff.” Thereupon
this action was brought.

The contention of the defendants is, that the returns made
to the writs are void, because, by sec. 22 of the Winding-up Act,
it is provided that, “ after the winding-up order is made, no
suit, action or other proceeding shall be proceeded with or com-
menced against the company, except with the leave of the Court
and subject to such terms as the Court imposes;” and by sec.
23 it is provided that “every attachment, sequestration, distress
or execution put in force against the estate or effects of the com-
pany after the making of the winding-up order shall be void.”

The cases collected by Mr. Justice Riddell in Grills v. Fardk,
21 O.L.R. 457, are relied upon as shewing that it is open to the
defendants to attack the return in a proceeding such as this.
That action, and the cases there cited, were not proceedings
under the same provision of the Ontario Companies Act, but
were under the provision which enables a creditor of the com-
pany to reach the unpaid capital by proceeding against the indi-
vidual shareholders — analogous to sci. fa. Before these proceed-
ings can be taken, it must be shewn that an execution against

D. C.
1912

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Jardine.

Middleton, J.

330

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1912

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Middleton, J.

[VOL.

the company has been returned unsatisfied. Moore v. Kirkland,
5 C.P. 452, and Jenkins v. Wilcock, 11 C.P. 505, both determine
that what the statute requires is not a return pro forma, but a
return after due diligence to realise the amount out of the effects
of the company. As it is put by Draper, <C. J., in the latter case :
“It is not, to be sure, a mere illusory formal proceeding, to give
colour to proceedings against a shareholder.”

Brice v. Munro, 12 A.R. 453, establishes that all that is
required is, that the execution should be issued to the Sheriff
of the county in which the head office of the company is.

Upon the facts in this case, it is quite clear that the return
to the execution was not a mere colourable and illusory return,
and that the Sheriff had exercised due diligence to find assets
within his shrievalty. Upon the hearing it was not shewn that
there were any assets which could have been taken under execu-
tion. At present it seems to me that the onus Was upon the
defendants, but the plaintiffs have assumed that it was for them
to do more than put in the return ; and, if they rightly assumed
the onus, they have abundantly discharged it.

Then, does the Dominion Act quoted prevent the making of
the return after the winding-up? I think clearly not. That
statute aims at the ratable distribution of the assets of the com-
pany among its creditors; and so the winding-up supersedes the
executions and prevents the creditor from further prosecuting
his execution against the assets of the company. The Sheriff
would then be justified in returning the execution unsatisfied.
He is not by the Ontario Act required to make a return nulla
bona; and I think it would be sufficient if he made a special
return, stating: “I return the writ unsatisfied, because I am
unable to take the assets of the company within my bailiwick in
execution, by reason of the making of an order under the
Dominion Winding-up Act for the winding-up of the company.”
This cannot be regarded as a “proceeding with the writ against
the company,” which is the thing prohibited by the statute.
The Ontario statute, which imposes this liability upon the direc-
tors of the company, seeks to protect them from vexatious pro-
ceedings while the company has assets to which the creditor may
resort. As soon as these assets are withdrawn from and ren-

XXVI.]

ONTARIO LAW REPORTS.

331

dered unavailable to the process of the wage-earner, and the
Sheriff certifies that there are no assets which he can take, the
obstacle is removed and the wage-earner is free to enforce his
remedy.

It is argued that the plaintiff has not proved that the defen-
dants are directors of the company. He has put in a certified
copy of the last Government return, which shews that the de-
fendants were then directors; and he has produced the minute-
book of the company from the custody of the liquidator, these
minutes shewing that the directorate has not since been changed.
This appears to be sufficient.

Two minor questions were argued before us. It was said
that an allowance for travelling expenses did not come within
the statute. We thought it did.

Then the plaintiff complained that he had not been allowed
the costs of the second writ of execution, and cross-appealed
with reference to it. We think the Judge was right in disallow-
ing these. See Marquis of Salisbury v. Ray (1860), 8 C.B. N.S.
193; and In re Long, Ex p. Cuddeford (1888), 20 Q.B.D. 316.

Both appeals should be dismissed. The defendants should
pay the costs, less $5 allowed in respect of the cross-appeal.

The facts in the Perryman case are substantially similar,
and the same order will be made in it.

Latchford, J. : — I agree.

Appeals dismissed.

D. C.
1912

PUKULSKI

Jardine.

Middleton, J.

332

ONTARIO LAW REPORTS.

[VOL.

[IN CHAMBERS.]

1912

Kuula v. Moose Mountain Limited.

April 17
May 3

Practice — Consolidation and Stay of Actions — Common Defendant — Distinct
Claims of Different Plaintiffs — Damages — Directions as to Trial.

Four different plaintiff's brought separate actions against the same defend-
ants; the cause of action in each case was injury to the premises of the
plaintiff by the spread of fire negligently set out by the defendants upon
their land and negligently permitted to spread to the plaintiff’s land: —

Held, affirming the order of the Master in Chambers, that there could not
be consolidation of the actions, upon the application of the defendants,
either in the strict sense of the word “consolidation,” as used in Con.
Rule 435, or in the looser sense, as where one of the actions is selected
as a test action, and the trial of the others stayed until it has been
finally determined. The issues in the four cases, though similar, were
quite distinct. And a plaintiff cannot be compelled to tie up his case
with those of the other plaintiffs, without his- consent.

Lee v. Arthur (1908), 100 L.T.R. 61, Westbrook v. Australian Royal Mail
Steam Navigation Co. (1853), 23 L.J.N.S. C.P. 42, and Williams v. Town-
ship of Raleigh (1890), 14 P.R. 50, applied and followed.

Although a consolidating order was refused, a direction was given that the
four actions should be entered for trial at the same sittings, in order
that the trial Judge might make such arrangements as would prevent
unnecessary repetition of evidence.

Consideration of the practice in regard to the consolidation and stay of
actions.

Motion by the common defendants in the above action and
three others, each brought by a different plaintiff, for an order
consolidating the four actions or staying three of them until
after the trial and final disposition of one, the defendants un-
dertaking to be bound by the result in that one.

April 16. The motion was heard by Mr. James S. Cart-
wright, K.C., Master in Chambers.

R. C. H. Cassels, for the defendants.

H. E. Rose, K.C., for the several plaintiffs.

April 17. The Master : — These four actions are brought to
recover damages alleged to have been suffered by the respective
plaintiffs through a fire set out by the defendants on their own
lands in the township of Hutton, on the 10th July, 1911.

The first plaintiff claims $2,809.02 ; the second, $95,000 ; the
third, $32,500 ; and the fourth, $31,207.58. No details are given
of these sums. In each case the statement of claim alleges negli-
gence on the part of the defendants. The plaintiffs are all

XXVI.]

ONTARIO LAW REPORTS.

333

represented by the^same solicitors. The statement of defence in
each case is a simple denial of the allegations of the statement
of claim.

The defendants now move to have these actions consolidated,
or to stay three of them until the first action has been tried,
the defendants undertaking to be bound by the result in that

Master in
Chambers.

1912

Kuula

Moose

Mountain

Limited.

case.

The defendants also ask that only one of four examinations
of their officers for discovery be allowed to proceed. In each
case, an appointment has been taken out for this purpose, and in
each case for the examination of a different officer.

Unless the decision in one of a number of actions, such as
those in question, would necessarily dispose of the essential
cause of action in the others, no order could be usefully made
to stay the rest. And unless this could be done, the actions
could evidently not be consolidated.

The present cases seem to be analogous to that of Williams
v. Township of Raleigh (1890), 14 P.R. 50. There, at p. 53,
it was said: “ Proof that there was the resulting injury to the
lands of one plaintiff would not be proof of any evidence at
all that there was the like” (or any other) “injury to the
lands of any other plaintiff.” These words are applicable to
the present motion; and, though the decision was given before
Con. Rule 185 was amended to read as it now stands, yet it is
not less an authority.

It is at least doubtful if these four plaintiffs could have
united in one action. The only thing alleged in common is the
fact that a fire or fires were negligently set out by the defend-
ants. This, though technically in issue, is probably not denied,
so far as the fact of fire being set out is concerned. But what
would be sufficient proof of negligence by one plaintiff might
not be so in the case of the others — much would depend upon
location, direction of wind, condition of the plaintiff’s own
property, and other circumstances peculiar to each case.

The only direction that can usefully be given now is, that
the actions be all set down together so that any evidence com-
mon to all (if such there be) may not be repeated, as the trial

23 — XXVI. O.L.R.

334

Master in
Chambers.

1912

Kutjla

Moose

Mountain

Limited.

ONTARIO LAW REPORTS. [vol.

Judge would, no doubt, direct. See Carter v. Foley -0 ’Brien Co.
(1912), 3 O.W.N. 888, citing the Raleigh case.

As to the examinations for discovery, that point too was dealt
with in Carter v. Foley-0 ’Brien Co., though there it was the con-
verse case of a plaintiff wishing to have only one examination for
discovery, to be applicable to all the three actions. There it was
said by Middleton, J. : “Even if convenience indicated the
propriety of the order sought, I am clear that there is no power
to make it.”

Neither of the reliefs asked for here could possibly have
been granted if the plaintiffs had not all been represented by
the same solicitors. See as to this, Conway v. Guelph and Goderich
R.W. Co. (1907), 9 O.W.R. 369, affirmed on appeal, ib. 420 —
where the matter is considered generally, and the difficulties
that might arise if consolidation was ordered, are pointed out.

For the same reasons, it does not seem possible to interfere
with the examinations for discovery. As the plaintiffs’ solici-
tors are the same, it is not to be presumed that, if one examina-
tion gives the necessary information, they will proceed with
the others — especially as these depositions cannot be used at the
trial. But, even if they do, that must be left to the trial
Judge or the Taxing Officer to deal with, when the question of
the costs is raised before them or either of them. The only way
that occurs to me of avoiding more than one examination is for
the defendants to make admission of such fact or facts as are
common to all the cases.

In this way possibly the length of more than one examina-
tion might be considerably reduced, even if proceeded with.
But, apart from their own consent, there is no power to control
or limit the plaintiffs’ proceedings so long as they are regular.

The motion will be dismissed — costs in the cause to the plain-
tiffs.

The defendants appealed from the order of the Master.

April 30. The appeal was heard by Middleton, J., in
Chambers.

R. C. H. Cassels, for the defendants.

H. E. Rose, K.C., for the plaintiffs.

XXVI.]

ONTARIO LAW REPORTS.

335

May 3. Middleton, J. : — It is said that on or about the
10th July, 1911, the defendants set out a fire upon their lands,
which fire spread, and destroyed the premises of the several
plaintiffs in these four actions. In each action the plaintiff
presents his case in alternative ways. First, he charges that
the fire set out on the defendants’ premises spread to his;
next, he charges that the fire was set out negligently; and, in
the third place, that by reason of the negligence the fire was
permitted to spread on the defendants’ premises to the plain-
tiff’s premises.

The Master, while refusing consolidation of the actions,
has directed that they shall all be entered for trial at the same
sittings of the Court, and at the trial the presiding Judge will,
no doubt, make such arrangements as will prevent unnecessary
repetition of evidence, in all the cases. But it is manifest that,
if each plaintiff has to establish that the fire escaped from the
defendants’ premises to his premises by reason of the negligence
of the defendants, the issue in each case, although similar, is
quite distinct.

There is much confusion upon the subject of consolidation of
actions, arising mainly from a loose and inaccurate use of the
word “consolidation.” As said by Moulton, L.J., in Lee v.
Arthur (1908), 100 L.T.R. 61, 62: “Consolidation is much more
rarely applicable than is generally supposed, because the ex-
pression is used in cases where the word is really not appro-
priate at all, as in cases where the trial of one action is stayed
pending the hearing of another action. In a case like that the
Court will not allow its process to be abused. That is often
called 'consolidation,’ but it is not really consolidation.”

It is important, in the first place, to observe that Con. Rule
435 is intended to deal with the consolidation of actions, in the
strict sense of that term. The jurisdiction to stay actions prob-
ably exists quite apart from any statutory provision^ as part of
the inherent power of the Court over its own process; but this
power is recognised and confirmed by sec. 57, sub-sec. 9, of
the Judicature Act.

Con. Rule 435 provides that ‘ ‘ actions may be consolidated by
order of the Court or a Judge in the manner in use in the

Middleton, J.

1912

Kuula

Moose

Mountain

Limited.

336

Middleton, J.

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Mountain

Limited.

ONTARIO LAW REPORTS. [vol.

Superior Courts of Common Law, prior to the Ontario Judi-
cature Act, 1881.” The terms of this Rule have given rise to
some difference of opinion. It. was at one time supposed that
it permitted consolidation only in the cases in which at com-
mon law consolidation would have been ordered prior to the
Judicature Act. But this has been set at rest by the decision
in the Court of Appeal in Martin v. Martin & Co., [1897] 1 Q.B.
429, where this construction of the Rule was rejected, and it is
said that the true meaning of the expression “in the manner in
use,” etc., is not to continue the practice in force before the
Act, hut “that if an order is made it should he treated in the
same manner as before.”

At common law, consolidation originally applied to the case
where there were two actions between the same parties. There
the actions were “consolidated,” in the strict sense of the term;
the issues raised in the two actions were directed to be set up
in one action. If the plaintiff unnecessarily instituted two or
more actions, based upon separate claims, which could conveni-
ently be tried together, his conduct was regarded as vexatious.
If good reason existed for the separate actions — e.g., if one claim
was not due when the other action was brought — the Court, in
the control of its own process, consolidated so as to avoid un-
necessary litigation.

By statute 19 Viet. ch. 43, sec. 76 — afterwards sec. 75 of
the Common Law Procedure Act, CjS.U.C. 1859, ch. 22 — a hus-
band and wife, suing in respect of an injury to the wife, might
join in the same suit a claim by the husband in his own right;
and, if separate actions were brought, these might he consoli-
dated. This is also true consolidation.

At common law also, a practice had grown up, not upon any
statutory power, but entirely upon the inherent jurisdiction of
the Court, of staying the trial of actions pending the determin-
ation of a test action. This frequently is somewhat loosely
described as “consolidation.” The practice was introduced by
Chief Justice Mansfield in actions brought against underwriters
in insurance cases. The promises of the underwriters being
separate, separate actious had to be brought, in respect of any
loss, against each of the underwriters. Frequently there was

XXVI.]

ONTARIO LAW REPORTS.

337

■

only one question really to be tried, sneli as the fact of loss.
Upon the application of the defendants in such a. case, the
actions would be stayed, if the defendants undertook to consent
to judgment in the event of the plaintiff succeeding in the test
action. In the event of the plaintiff’s failure, he would then
either abandon the other actions or proceed with them, as he saw
fit. As this relief was an indulgence to the defendants, they
were compelled to consent to this somewhat one-sided bargain.
See, for example, Colledge v. Pike (1886), 56 L.T.R. 124.

Conversely, where a plaintiff, having brought several actions
for similar causes of action, applied for a stay of proceedings to
relieve him from the onus of prosecuting a number of actions in
which he might be unsuccessful, a stay was ordered, upon the
terms that, if he failed in the action which he chose as a test
action, he should consent to a judgment against him in all the
others.

In the Courts of equity, consolidation, in either the strict
sense or the modified sense, seems to have been unknown. The
Court undoubtedly exercised its power to restrain abuse of its
process, and it would not permit the prosecution of two suits
for the same cause of action; but the reported instances differ
widely from the cases at common law. If two actions were
brought on behalf of an infant by different next friends, the
Court stayed the proceedings in one. If two suits were brought
for administration, as soon as judgment was pronounced in
one, the proceedings in the other were stayed; because the ad-
ministration judgment was a judgment in favour of all. Where
several suits were brought by different debenture-holders, for
the purpose of realising their securities, one action alone was
allowed to proceed. The principle in all these cases was, that
two suits for the same relief ought not to be allowed to proceed
in the same Court concurrently. See cases collected in Daniell’s
Chancery Practice, 5th ed., p. 698.

After the Judicature Act, in Amos v. Chadwick (1877), 4
Ch.D. 869, Malins, V.-C., construed the Consolidated Rule in the
manner now rejected by the Court of Appeal ; but, by virtue of
the inherent power to prevent abuse of the process of the Court,
lie stayed until after the trial of the test action seventy-eight

Middleton, J.

1912

Kuula

Moose

Mountain

Limited.

338

ONTARIO LAW REPORTS.

Middleton, J.

1912

Kuula

Moose

Mountain

Limited.

[VOL.

actions brought by different shareholders against the directors
of a company for misrepresentation in the prospectus. The
plaintiff selected failed to prosecute his action, and, as he did
not appear at the trial, the action was dismissed. The terms
of the order for consolidation appear from the report of the
case in (1878), 9 Ch.D. 459. It provided that the plaintiffs,
who had applied for consolidation, should be bound by the test
action; but the defendants were to be at liberty to require a
separate trial. After this abortive proceeding, a motion was
made for relief and for the trial of another action as a test
action. Malins, V.-C., then made an order substituting another
action as a test action. The defendants appealed; and the sole
question upon the appeal was, whether the test action had been
“ tried/ ’ within the meaning of the terms of the order. The
Court upheld the defendants’ contention. But it is manifest
that some, at any rate, of the Judges doubted whether the
original order had been properly made; Brett, L.J., saying (9
Ch.D. at p. 464) : ‘‘It seems to me that no such order as this
ought to be made unless the questions in the actions are sub-
stantially the same, and the evidence would be substantially the
same if they were all tried.”

This view is that now adopted in the case already cited,
Lee v. Arthur, where the Master of the Rolls quotes the judg-
ment in the case of Corporation of Salt ash v. Jackman (1844),
1 D. & L. 851, and states that the Court “cannot compel one
defendant against his wish to have his case tied up with those of
defendants in other actions.”

The same reasoning shews the impossibility of compelling a
plaintiff to tie up his case with those of other plaintiffs, without
his consent. Westbrook v. Australian Royal Mail Steam Navi-
gation Co. (1853), 23 L.J.N.S. C.P. 42, is an illustration of this.
Eight separate passengers, by the same attorney, brought separ-
ate actions for damages arising out of a breach of contract for
passage, whereby the plaintiffs suffered in their health. Maule,
J., said: “They have different grievances. Mr. Smith could not
be said to have suffered in Mr. Brown’s health.”

Williams v. Township of Raleigh, 14 P.R. 50, affords another
illustration. Several plaintiffs brought separate actions for

XXVI.] ONTARIO LAW REPORTS.

injury to their several farms by certain drainage works ; and it
was held by Ferguson, J. — a Judge most familiar with the com-
mon law practice — that there could not be consolidation, in
either the true or the modified sense of that expression.

The direction which has been given by the learned Master in
Chambers, I think, satisfactorily meets the case. Manifestly,
damages will have to be assessed in the different cases; and it
would be most unfair to direct the trial of the individual claims
to be delayed, when this would delay the recovery of final judg-
ment. The circumstances prevent the imposition of the term
invariably required: a stay will only be granted when the de-
fendants consent to judgment — that is, a final judgment — in
the event of their failing in the test action.

The appeal will be dismissed. Costs to the plaintiffs in any
event.

[IN THE COURT OF APPEAL.]

Re West Lorne Scrutiny.

Municipal Corporations — Local Option By-law — Voting on — Scrutiny — Scope
of — Municipal Act, 1903, secs. 369-372 — Votes of Tenants — Residence —
Finality of Voters’ Lists — Voters’ Lists Act, 7 Edw. VII. ch. 4, sec. 24(2)
— Vote of Person Disentitled ~by Eon-residence — Inquiry as to how Bal-
lot Marked — Municipal Act, 1903, sec. 200 — Deduction of Disallowed
Votes from Majority in Favour of By-law.

A scrutiny under sees. 369-372 of the Consolidated Municipal Act, 1903,
in regard to the voting upon a local option by-law, is something more
comprehensive than a simple recount; and, when proceeding with a
scrutiny under that section, a County Court Judge has authority to
inquire whether any persons who have cast their ballots come within
the excepted class mentioned in sub-sec. 2 of sec. 24 of the Ontario Voters’
Lists Act; Maclaren and Meredith, JJ.A., dissenting.

Upon such a scrutiny, it is competent for the County Court Judge to de-
clare void the vote of a person voting as a tenant who has cast a ballot,
when it appears that, although his name was on the certified list, he was
not, when it was placed thereon, resident and has not since become resi-
dent within the municipality to which the list relates — within the very
terms of sub-sec. 2, above referred to, he is not and has not been resident
within the municipality to which the list relates; Maclaren and
Meredith, JJ.A., dissenting.

Upon such a scrutiny, the County Court Judge has no power to inquire
how any person who was not entitled to vote, marked his ballot: Muni-
cipal Act, 1903, sec. 200.

And the County Court Judge should deduct the disallowed votes from the
affirmative votes.

Review of the previous decisions upon these questions.

In re Local Option By-law of the Township of Saltfleet (1908), 16 O.L.R.
293, and Re Orangeville Local Option By-law (1910), 20 O.L.R. 476,
specially considered.

Judgment of a Divisional Court, 25 O.L.R. 267, reversed.

339

Middleton, J,

1912

Kuula

Moose

Mountain

Limited.

C. A.
1912

April 29

340

ONTARIO LAW REPORTS.

C. A.
1912

West

Lorne

Scrutiny.

[vol.

Appeal by D. H. Mehring, the applicant for a scrutiny, from
the order of a Divisional Court, 25 O.L.R. 267, 277, varying the
order of Middleton, J., 23 O.L.R. 598.

January 24. The appeal was heard by Moss, C.J.O., Gar-
row, Maclaren, Meredith, and Magee, JJ.A.

C. St. Clair Leitch and J. M. Ferguson, for the appellant,
argued that the case turned on the interpretation of sec. 24 (2)
of the Voters’ Lists Act, and on the decision in In re Local
Option By-law of the Township of Saltfleet (1908), 16 O.L.R.
293, and that, on the evidence material and the law applicable
to the case, an order should not be made prohibiting the County
Court Judge from certifying that the by-law in question had not
been approved by the requisite three-fifths majority.

W. E. Raney, K.C., and J. Hales, for Dugald McPherson,
respondent, argued that the decision of the Divisional Court on
the first branch of the case, the question as to the jurisdiction of
the County Court Judge to go behind the voters’ list, was right
and should be affirmed. The following cases were referred to:
Re Weston Local Option By-law (1907), 9 O.W.R. 250; the Salt-
fleet case, supra ; Re Orangeville Local Option By-law (1910),
20 O.L.R. 476; Re Ellis and Town of Renfrew (1911), 23 O.L.R.
427; In re McGrath and Town of Durham (1908), 17 O.L.R.
514. As to the second branch of the case, the right of the
County Court Judge to inquire how the persons whose votes
were disallowed, did vote, it was submitted that the judgment
of Middleton, J., was right, and that the Courts had gone too
far in their requirements as to absolute secrecy.

Leitch, in reply, referred to Re Sinclair and Town of Owen
Sound (1906), 13 O.L.R. 447; Haldimand Dominion Election
Case (1888), 1 Ont. Elec. Cas. 529; Re Lincoln Election Petition
(1878), 4 A.R. 206; Rex ex rel. Ivison v. Irwin (1902), 4 O.L.R.
192.

April 29. Moss, C.J.O. : — Appeal from a judgment of a
Divisional Court, reported 25 O.L.R. 267, allowing an appeal
from a judgment of Middleton, J., reported 23 O.L.R. 598. The
facts are fully stated in the report.

XXVI.]

ONTARIO LAW REPORTS.

341

This case furnishes another example of the difficulty and
confusion which so often arise from the adoption by the Legis-
lature of the device of incorporating by reference some of the
provisions of one statute into the body of another statute which
is being enacted. The disadvantages of this mode of legislation
have been remarked upon in England and this country, and it
has been truly said that this procedure makes the interpretation
of modern Acts of Parliament a very difficult and sometimes
doubtful matter. See Knill v. Towse (1889), 24 Q.B.D. 186,
196, where the question was not unlike in some respects the
question involved in this case. And a legislative committee in
England is reported to have described legislation by reference
as making an Act so ambiguous, so obscure, and so difficult that
the Judges themselves can hardly assign a meaning to it, and
the ordinary citizen cannot understand it without legal advice :
Craies’ edition of Hardcastle on Statutory Law (1907), p. 26.

It is scarcely to be wondered at, therefore, that unanimity
of opinion is not to be found expressed in many of the decisions
in which the questions arising on this appeal or some of them
have been discussed.

The first question raised in the appeal has been much debated
and has given rise to much divergence of opinion among the
Judges who have had it under consideration in other cases. As
stated by Teetzel, J., in his opinion delivered while sitting as a
member of the Divisional Court whose judgment is now in
appeal, the question is : whether, upon a scrutiny under the
Municipal Act, the County Court Judge may declare void and
deduct from the result the vote of a tenant whose name was
upon the certified voters’ list, but who was not in fact a resident
of the municipality when the list was certified, and who never
afterwards became a resident therein.

This question affects 4 votes polled ; and, if answered in the
negative, as it was by the Divisional Court, practically ends
any necessity for discussion as to the fate of the one other vote
polled, which is in question here.

In holding that the 4 votes in question were not open to
attack upon the scrutiny, the Divisional Court considered itself
bound so to hold by the decision of another Divisional Court in

C. A.
1912

West

Lorne

Scrutiny.

Moss, C.J.Q.

342

ONTARIO LAW REPORTS.

C. A.
1912

West

Lorne

Scrutiny.

Moss, C.J.O.

[VOL.

In re Local Option By-law of the Township of Salt fleet, 16
O.L.R. 293, though it had been subjected to adverse comment in
some other cases.

In Re Orangeville Local Option By-law , 20 O.L.R. 476,
Meredith, C. J., considered the question of the jurisdiction of the
Judge to enter upon an inquiry as to the right to vote of any
one who has deposited his ballot paper, and declared his own
opinion to he against the exercise of such jurisdiction. He ex-
pressed the opinion that the inquiry is limited to a scrutiny of
the ballot papers, and differs only from a recount in that the
Judge is not limited to dealing with the ballot papers ex facie,
but may take evidence in the same way as may be done upon a
trial of the validity of an election of a member of a municipal
council for the purpose of determining whether any ballot paper
ought or ought not to be counted.

* ... I

With deference, I am unable to follow the distinction drawn
between a scrutiny of ballot papers and a scrutiny of votes,
bearing in mind the object with which the scrutiny is entered
upon. The Judge is to determine and certify whether the
majority of votes given is for or against the by-law. He is not
merely, as in the case of a recount under sec. 189 of the Con-
solidated Municipal Act, 1903, to count up the votes given upon
the ballot papers not rejected, and make up a written statement
of the number of votes given for each candidate and of the
number of ballot papers rejected and not counted by him, and
certify the result to the returning officer. In all this he is acting
in a ministerial capacity. In a scrutiny he is acting in a judicial
inquiry, with the purpose of ascertaining which way, in truth
and in fact, the majority of the votes is given. Light is thrown
upon this view by the language of sec. 24 of the Ontario Voters’
Lists Act, 7 Edw. VII. ch. 4, which expressly refers to a scrutiny
under the Municipal Act, as well as to one under the Ontario
Election Act. That section declares that “the certified list
shall, upon a scrutiny, under” either of these Acts, “be final
and conclusive . . . except.” The exception applies to one

scrutiny as much as the other. Then what is the extent of the
exception under sub-sec. 2, which is the one with which we are
immediately concerned? It applies to persons who, subse-

XXVI.]

ONTARIO LAW REPORTS.

343

quently to the list being certified, are not or have not been resi-
dent either within the municipality to which the list relates, or
within the electoral district for which the election is held, and
who by reason thereof are, under the provisions of the Ontario
Election Act, disentitled to vote.

If this sub-section applies to municipal elections, it also
applies to voting on by-laws, by the express terms of the pre-
ceding part, which speaks of a scrutiny under the Municipal
Act.

So that, when conducting a scrutiny under the Municipal
Act, reference must be made to the provisions of sec. 24 of the
Ontario Voters’ Lists Act in order to ascertain the extent to
which the inquiry can proceed. I agree with those who think
that a scrutiny under sec. 371 of the Consolidated Municipal
Act, 1903, is something more comprehensive than a simple re-
count; and that, when proceeding with a scrutiny under that
section, the County Court Judge has authority to inquire into
the question whether any persons who have cast their ballots
come within the excepted class mentioned in sub-sec. 2 of sec.
24 of the Ontario Voters’ Lists Act.

C. A.
1912

West

Lorne

Scrutiny.

Moss, C.J.O.

I am also of opinion that it is competent for the County
Court Judge to declare void the vote of a person who has cast
a ballot, when it appears that, although his name was on the
certified list, he was not, when it was placed thereon, resident
and has not since become resident within the municipality to
which the list relates. Within the very terms of the sub-section,
as it appears to me, he is not and has not been resident within
the municipality subsequently to the list being certified. I am
unable to see why any distinction should be drawn between his
ease and that of a person who was resident within the munici-
pality when the list was certified, but ceased to be resident sub-
sequently to the list being certified.

The one remaining vote held void by the County Court Judge
was admittedly within the exception of sub-sec. 2. The result
should, in my opinion, be that the County Court Judge’s ruling
was correct, and that his certificate should stand.

The remaining question dealt with by the Divisional Court
is, whether, if the County Court Judge, upon a scrutiny con-

344

ONTARIO LAW REPORTS.

C. A.
1912

West

Lorne

Scrutiny.

Moss, C.J.O.

[VOL.

ducted by him, finds that a person whose name was upon the
list, hut who had no right to vote, did vote, such person may be
compelled to disclose before the County Court Judge how he
did vote. While the decision of the Divisional Court on the
other branches of the case rendered it unnecessary to consider
this question so far as the result was concerned, it deemed it of
sufficient importance to justify a determination upon it.

Without entering upon any extended discussion, I think it
quite sufficient for me to say that I entirely agree with the con-
clusion of the Divisional Court upon the question, as expressed
in the opinion of Teetzel, J.

The result upon the whole is, that the order of the Divisional
Court should be set aside, and that the County Court Judge
should be left at liberty to certify the result of the scrutiny to
the council.

But, in view of the varying and conflicting opinions and
the apparent difficulty in solving the questions at issue, there
should be no costs of any of the proceedings.

Garrow, J.A. This is an appeal from the judgment of a
Divisional Court reversing an order of Middleton, J., made in
the matter of a vote taken in the village of West Lorne upon a
local option by-law.

After the vote had been taken, one Dameon H. Mehring
applied to the Judge of the County Court of the County of
Elgin for a scrutiny of the ballot papers. The scrutiny was
granted, and was proceeding when one Dugald McPherson ap-
plied to Middleton, J., for an order prohibiting the County
Court Judge from entering upon an inquiry as to the right to
vote of 5 persons whose names appeared upon the voters’ list
and who had voted, but who, it was alleged, were disqualified,
or, in the alternative, for a mandatory direction to the County
Court Judge to ascertain how these persons had voted.

Middleton, J., agreeing with the County Court Judge, held
that these persons were not entitled to vote, and directed him
to inquire and ascertain how they had voted in order to deter-
mine whether the majority of the lawful votes given was for or
against the by-law.

XXVI.]

ONTARIO LAW REPORTS.

345

An appeal from this order was taken and was heard first
before the King’s Bench Division (see 25 O.L.R. 267) ; and, in
consequence of the difference of opinion there expressed, re-
argued before the Exchequer Division (see 25 O.L.R. 277), when
the appeal was allowed.

The judgment of Middleton, J., is reported in 23 O.L.R.
598.

C. A.
1912

West

Lorne

Scrutiny.

Garrow, J.A.

The polling took place on the 2nd January, 1911. The
voters ’ list was finally revised and certified on the 28th October,
1910. The 5 persons whose votes are in question were all upon
the list as tenants. Pour of them had ceased to reside in the
municipality before the voters’ list was certified. One of them
became non-resident afterwards, namely, on the 5th December,
1910. The total number of votes polled, including those of the
before-mentioned 5 persons, was 234. The votes for the by-law
were 142, and against 92. The learned County Court Judge
proposed to deduct these 5 votes from the total, leaving as the
actual total 229. And he also proposed to deduct the whole of
the 5 votes from the votes cast in favour of the by-law, which
would have left 137, or less than the required three-fifths of the
proper total, and would have so certified but for the prohibition
granted by Middleton, J.

The Divisional Court was of the opinion, following the Salt-
fleet case, 16 O.L.R. 293, that the County Court Judge had no
legal authority to disallow the 4 votes given by the tenants who
had ceased to reside in the municipality before the voters’ list
was- certified, and that in that case it was unnecessary to deal
with the fifth, who had ceased to so reside thereafter, because
the disallowance of that vote would not affect the result. The
Court further held that the inquiry directed by Middleton, J.,
into how a person had voted, would be contrary to the provisions
of sec. 200 of the Consolidated Municipal Act, 1903.

The questions involved are, therefore, three, namely: (1)
were the 5 tenants, or any of them, disqualified because they
had ceased to reside in the municipality before the voting; (2)
had the County Court Judge power, on a scrutiny held under
sec. 369 of the 'Consolidated Municipal Act, 1903, to disallow
such votes, or any of them; and (3), if they were properly dis-

346

ONTARIO LAW REPORTS.

[VOL.

C. A.
1912

West

Lorne

Scrutiny.

Garrow, J.A.

allowed, what should follow — should they he deducted, as the
County Court Judge proposes to do, from the affirmative vote,
without inquiry, or should There be an inquiry, as Middleton, J.,
seemed to think, and the deduction made as the result of such
inquiry ?

By sec. 141 (1) of the Liquor License Act, a local option
by-law must, before being finally passed, be approved by the
“ electors of the municipality’’. And Who are such “electors”
is determined by sec. 86 of the Consolidated Municipal Act,
1903. We are concerned here only with tenants, and their right
to vote, or in other words, to be “electors” of the municipality.
These are provided for by clause “secondly” of sec. 86, which
says : ‘ ‘ All residents of the municipality who have resided
therein for one month next before the election, and who are, or
whose wives are, at the date of the election, tenants in the muni-
cipality. ” They must, of course, in addition, be upon the voters’
list used at the election.

Residence alone is not sufficient, nor is being upon the voters’
list, without residence, sufficient. Both must exist to qualify the
tenant voter. And, that being so, it is perfectly clear that none
of the 5 was qualified or entitled to vote on the by-law in ques-
tion. The Ontario Voters’ Lists Act, 7 Edw. VII. ch. 4, sec.
24, was relied on as the foundation 'for a contrary view. The
one statute, however, is of as much force and virtue as the other,
unless the later one was intended to repeal the earlier, of which
there is not the very slightest indication. And both must,
therefore, be read together, as, in my opinion, they can be with
perfect harmony, as expressing the law upon the subject. No
one disputes the finality of the voters’ list as expressed in sec.
24 of the Voters’ Lists Act. However disentitled to be upon
the list, if a person is upon it, and conforms to sec. 86 of the
Municipal Act as to residence, such a person’s vote cannot, I
think, be questioned. It was said in the Orangeville case, 20
O.L.R. 476, at p. 479, by Meredith, C.J., that the only para-
graph of sec. 24 of the Voters’ Lists Act which is applicable to
a municipal election, or a vote on a by-law, is the first, and that
paragraph 2 is applicable only to elections under the Ontario
Election Act. I am, with deference, unable to agree with the

XXVI.]

ONTARIO LAW REPORTS.

347

latter statement. There is nothing in the Election Act requir-
ing a voter to reside in any particular municipality after the
voters’ list is made up and certified, hut he must continue to
reside in the electoral district to entitle him to vote at an elec-
tion to the Assembly. The words “within the municipality,”
followed by “or within the electoral district,” would, therefore,
make the former words meaningless and unnecessary, unless
they are held to apply, as, in my opinion, they do, to municipal
elections and to the disqualification by reason of non-residence
for which the Municipal Act provides.

Clause 2 of sec. 24 should, perhaps, have contained a refer-
ence to the Municipal Act, as well as to the Ontario Election
Act. As it is, its proper construction is, I think, to regard the
later words, ‘ ‘ and who by reason thereof are, under the provisions
of the Ontario Election Act, disentitled to vote,” as referring
only to the words, ‘ ‘ or within the electoral district for which the
election is held,” which immediately precede them. It is un-
reasonable to suppose that the Legislature, while carefully pre-
serving the provisions as to residence contained in the Election
Act, intended, in such an indirect manner, to repeal the very
similar provisions as to residence contained in the Municipal
Act, affecting as they do every class of voter except a free-
holder.

C. A.
1912

West

Lorne

Scrutiny.

Garrow, J.A.

The question, however, in .the view I take, is not vital, for
the real disqualification arises, in my opinion, not under the
Voters’ Lists Act so much as under the plain language of sec.
86 of the Municipal Act, which, while fully accepting the finality
of the voters’ list, cannot be ignored as to events subsequently
occurring or existing.

The next question is as to the power and authority of a
County Court Judge, upon a scrutiny, to deduct such votes — a
question which has been frequently discussed and upon which
divergent views have been from time to time expressed.

The decision of the Divisional Court in the Saltfleet case,
16 O.L.R. 293, seems to mark an epoch. Teetzel, J., before
whom the matter first came, was of the opinion that the County
Court Judge had no power to question the right of any voter
to vote, or to disallow any vote, and that his power was confined

348

ONTARIO LAW REPORTS.

C. A.
1912

West

Lorne

Scrutiny.

Garrow, J.A.

[VOL.

to compelling the production before him of the voters’ lists and
all material used at the election, and hearing evidence, as he
might consider necessary, with reference to the ballots, so that
he might ascertain, exactly the number of ballots cast for and
against respectively, and that he might determine, upon some-
thing more than 'the mere ballot itself, if necessary, as to its
validity or invalidity as a ballot. The appeal to the Divisional
Court was, upon the facts, dismissed with costs. But, in the
judgments of ithe learned Chancellor and Magee, J., a larger
view was taken of the County Court Judge’s powers, which
view has since, though frequently anathematised — see per
Anglin, J., in In re McGrath and Town of Durahm (1908), 17
O.L.R. 514; per Meredith, C.J., in the Orangeville case, 20
O.L.R. 476; and per Riddell, J., in Re Ellis and Town of Ren-
frew, 21 O.L.R. 74 — been followed.

The view of the learned Chancellor is set out on p. 302 of 16
O.L.R. As will be seen, he regarded the scrutiny in such a
case as something more than a simple recount, the extent of it
to be measured ‘ ‘ by what can be done on inspection of the ballot
papers, and the ascertainment of what votes are void ex facie,
and the scope of investigation contemplated by the exceptions
to the finality of the voters’ list.” Earlier on the same page, he
had said that a subsequent change of residence, which would
disqualify, might be investigated under sub-clause 2 of sec. 24
of the Voters’ Lists Act, but not a subsequent change of status.

With a subsequent change of status we have nothing to do
here. We are dealing only with the case of non-resident ten-
ants whose names are upon the voters’ list; and, with deference,
it seems to me to be a matter of perfect indifference when such
non-residence began, whether before or after the voters’ list
was certified, if in fact it continued to exist down to within one
month of the election or vote, as the case may be. The inquiry
in both cases is wholly as to a state of facts existing subsequent
to the perfection of the voters’ list, and is in no respect in
derogation of its finality, the point at which the inquiry in both
cases must begin.

I, therefore, agree with the decision in the Salt fleet case, as
far as it goes, with respect to the power of the ‘County Court

XXVI.]

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Judge to disallow the vote of a tenant because of non-residence
arising after the list was certified ; but I go further and say that,
in my opinion, no valid distinction can be drawn between that
case and the case of the non-resident tenant who was actually
non-resident when the list was certified, and afterwards so
continued.

I quite agree that a scrutiny is something more than a
recount. That it was intended to be something more is clearly
made manifest by the circumstance that the ordinary recount,
provided for in the case of municipal elections by sec. 189 of
the 'Consolidated Municipal Act, is also applicable to the case
of a vote upon a by-law, that section 'being one of those intro-
duced by sec. 351 — a circumstance, it seems to me, which has
not always been kept clearly in mind in dealing with the subject.
And that section (189) seems to make short work of another
matter upon which those who hold the narrower view have
occasionally built, namely, that the scrutiny is to be of the ballot
papers, which, they say, is not the equivalent of a scrutiny of
the votes. But throughout that section “ ballot paper” and
“vote” are used indiscriminately as representing and meaning
the same thing — in my opinion, the only sensible view.

Then as to the third point, what is to be done with the dis-
allowed votes? And as to that, the only question is, should
they all be deducted, as the learned County Judge thought,
from the affirmative votes? Middleton, J., was of the opinion,
evidently, in referring the matter back to the learned County
Court Judge, that the voters whose votes were disallowed could
be made to disclose in what way they had voted, upon the
ground that they were not voters, and therefore not entitled to
the protection of sec. 200 of the Consolidated Municipal Act.
But I am, with deference, unable to accept that view.

In the Orangeville case, 20 O.L.R. Meredith, C.J., at p. 483,
suggested, without determining, that in such a case the County
Court Judge should not make the deduction, but simply certify
the facts to the council. That view also seems to me, with defer-
ence, to be unsound. Under sec. 371, the only person who can
“determine whether the majority of the votes given is for or
against the by-law” is the County Court Judge. The council

24 — XXVI. O.L.R.

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could only act on his certificate determining the result one way
or the other.

West

Lorne

Scrutiny.

The subject is one of much difficulty. In the absence of the
ballots themselves, it is impossible to arrive at a perfectly satis-
factory result, nor, in my opinion, would the result he much

Garrow, .T.A.

more satisfactory if it was possible to examine under oath the
voter, who, if dishonest, knowing that he could not be found out,
could easily inflict further injury upon the side against which
he actually voted by pretending that he voted upon that side.
In some cases, perhaps, evidence, more or less reliable, might
be got as to the habits and associations of the voter which might
raise a presumption as to which way he had probably voted. A
hotel-keeper, a bar-tender, or other liquor-seller, it might fairly
be presumed, would probably vote against such a by-law, while
a member of a temperance organisation, or one who, without
being a member, was an abstainer in practice, would probably
vote the other way. And yet such evidence could not go very
far, for one object of the secret ballot is to protect the voter in
the expression of his honest convictions, even where his associa-
tions and the company he keeps, and such convictions, do not,
as must sometimes happen, agree.

Upon the whole, after much consideration, I am not pre-
pared to say that the learned County Court Judge was wrong
in proposing to deduct the disallowed votes from the total of
those cast in favour of the by-law. That seems to have been
for so long the practice that, if a change is desired, it should
come through legislation.

The result is, that, making such deduction, the by-law has
not received the requisite majority, and the County Court
Judge should certify accordingly.

The appeal should, therefore, to the extent I have indicated,
be allowed; but, under the circumstances, there should, I think,
be no costs, either here or below.

Magee, J.A. : — Upon the scrutiny, under sec. 369 of the Con-
solidated Municipal Act, 1903, the County Court Judge has
found 142 ballots marked in favour of the by-law and 92 against
it, and has rejected 6 ballots as improperly or insufficiently

XXVI.]

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351

marked. But he has gone beyond mere inspection of the ballot
papers, and on inquiry has found that 5 persons deposited ballots
whose names were on the voters’ list as tenants, but who had for
more than a month before the polling been and then were non-
residents of the municipality, and 4 of them in fact were non-
resident at the time of the certification of the list and continu-
ously thereafter. He considered the 5 not entitled to vote ; and,
having no evidence as to how they marked their ballot papers,
he could not certify that the 142 votes nor more than 137 were
cast for the by-law. The Divisional Court has prohibited him
from certifying that the by-law was not carried, and this appeal
is from that order.

Four questions arise. First, has the County Court Judge the
right, upon the scrutiny, under sec. 369, to go beyond an inquiry
how the ballot papers actually received and deposited were
marked (involving, if necessary, an inquiry as to lost and spuri-
ous ballots), and to inquire into the right of persons to vote
whose names are upon the voters ’ list and who have received and
deposited their ballot papers? Second, if so, can he reject the
votes of persons entered on the voters’ list as tenants who were
not in fact residents of the municipality at the time of the final
revision of the voters’ list, and who have continued to be non-
resident until after the polling day, and who in fact had not any
other right than as tenants"? Third, can a person who, at the
time of polling, had no right to vote, but whose name was on the
voters’ list, and who received and deposited a ballot paper, be
required to state how or whether he marked it? And fourth,
what is the result if it be found that some of those who voted
had no legal right to vote, and there is no evidence as to how
they voted?

The appellant, D. H. Mehring, who petitioned for the scru-
tiny, contends for an affirmative answer to the first and second
questions, and for the negative to the third, and on the fourth
that the number of illegal voters must be deemed to be possible
supporters of the by-law. The respondent, Dugald McPherson,
a supporter of. the by-law, who applied for the prohibition order
appealed from, contends for the opposite. The anomalous spec-
tacle is presented of friends of the by-law trying to uphold

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Magee, J.A.

votes which they believe to have been cast against it; while the
opponents wish to have these votes rejected without inquiry on
which side they were.

The first question was decided in the affirmative in 1908, by
a Divisional 'Court in In re Local Option By-law of the Township
of 8 alt fleet, 16 O.L.R. 293 ; and, despite the objections which
have been made thereto, I cannot say that I have any doubt as to
the conclusion there arrived at. As then pointed out, the history
of the legislation, the reasons for it, the procedure adopted, the
language copied from other enactments, the manifestly designed
analogy between the proceedings for by-laws and municipal and
provincial elections, and the absence of any other provision for
contesting the result where the clerk declares a by-law to have
been defeated, all point to the intention in 1876 to use the word
“scrutiny” in the sense in which it is ordinarily and in other
enactments used, and clearly to distinguish it from a mere re-
count on examination of the ballot papers themselves. The pro-
vision for this scrutiny was made in 1876, and has remained un-
changed and it should be interpreted as then. It was then
called “scrutiny of the ballot papers,” as it is still; and in 1880,
in 43 Viet. ch. 27, sec. 16, it was manifestly this scrutiny which
was referred to as “scrutiny of the votes,” as it yet is in the
corresponding present section, 366, and in sec. 366a, on a similar
subject. Indeed, only in secs. 366, 366a, and 369, do I find the
word “scrutiny” used, though a scrutiny is manifestly intended
and necessary in other proceedings. As pointed out in the Salt-
fleet case, votes and ballot papers were evidently considered
interchangeable expressions.

The scrutiny, then, in my opinion, involves the inquiry as to
the right to vote, and is not a mere recount which, with the right
to take evidence necessary for a recount (sec. 189, 7 Edw. VII.
ch. 40, sec. 4), is elsewhere provided for. But, in the inquiry as
to the right to vote, regard must be had to the enactment as to
the finality of voters’ lists.

That brings us to the second question, as to whether the non-
resident tenants could properly vote. In Be Ellis and Town of
Renfrew, 23 O.L.R. 427, it was pointed out that the provisions
in the Voters’ Lists Act, 1907, 7 Edw. VII. ch. 4, sec. 24, as to

ONTARIO LAW REPORTS.

353

I XXVI.]

the list when finally revised being final and conclusive evidence
| upon a scrutiny, was intended only for provincial and muni-
. cipal elections, and not for voting on by-laws — and that the list
itself was not the one to be used for the latter purpose, but, it
being the list of all and only those entitled to vote at elections,
the clerk had to make from it the list to be used for the by-law.
In no other sense is it made final for by-law purposes. But the
effect for the present case is practically the same. Section 24,
in clause 2, expressly excepts from the finality of the list “per-
sons who, subsequently to the list being certified, are not or have
not been resident either within the municipality to which the
| list relates, or within the electoral district for which the election
is held, and who by reason thereof are, under the provisions of
the Ontario Election Act, disentitled to vote.” In the Orange-
ville case, 20 O.L.R. 476, the learned Chief Justice of the Com-
mon Pleas considered that these last words, referring to the
latter Act, controlled the whole of clause 2, and that, therefore,
it does not refer to municipal elections. But, with much defer-
ence, I think he has not given due weight to the fact that the
Election Act does not require residence, after the list, in the
municipality, but only in the electoral district (8 Edw. VII.
ch. 3, secs. 19 and 95, and forms 17, 18, 19) ; whereas the Muni-
cipal Act (in secs. 86 and 112) does require residence in the
municipality; and the reference in clause 2 to the latter would
be meaningless if the clause is inapplicable to municipal elec-
tions. I am, therefore* of opinion that clause 2, as far as the
word 1 1 relates, ’ ’ must in this case be applied.

Even assuming that to be so, the Divisional Court considered
that the votes of the 4 tenants referred to could not be struck
off, as they had not changed their status, and the list was con-
clusive that they were resident tenants. It has not been con-
tended that the fifth should not be struck off if the list is not
final. The result would be that he who was longer a resident
would be in a worse position than those who had severed their
connection with the municipality long before, and who in fact
were wrongfully on the list, while he was rightfully on it. I
: find nothing in the statute to force us to such a conclusion. The

words are, plainly, “Persons who subsequently to the list being

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[VOL.

certified are not or have not been resident.” It does not say,
“persons who subsequently have become not resident or persons
who have subsequently ceased to be resident,” but “persons
who subsequently are not resident.” I confess, with much
deference to the opinions expressed, that I cannot see any war-
rant for adopting any other than the ordinary interpretation,
or striving for a result so opposed to the policy of the Act
against non-residents having a voice in the municipality’s
affairs. Reference has been made in some of the cases to the
judgment of the learned Chancellor in the Salt fleet case as if
he had expressed an opinion that a continued non-residence
would not disqualify ; but I do not read it as saying more than
that subsequently occurring non-residence would disqualify,
which is evidently all that he meant to deal with. In my opinion,
the learned County Court Judge rightly held all these 5 votes
to be invalid.

It is not suggested that there is any means of proving on
which side they or any of them were cast unless by calling the
voters themselves to disclose it. If any one or more of them had
intentionally displayed his ballot after marking it, though he
might be punished for doing so, I do not see why any one who
saw it and who was not sworn to secrecy should not be admitted
to prove, if he could, how it was marked.

In the absence of evidence of that sort, we come to the third
question. Section 200 of the Consolidated Municipal Act, 1903,
declares that no person who has voted at an election shall, in
any legal proceeding to question the election or return, be
required to state for whom he has voted. Section 351 makes that
section apply also to voting on by-laws. The provision in sec.
200 goes back to 1874 (38 Viet. eh. 28, sec. 34). Like provision
was made in 1874, as to provincial elections, by 37 Viet. eh. 5,
sec. 32 (now 8 Edw. VII. eh. 3, sec. 166), and as to Dominion
elections by 37 Viet. ch. 9, sec. 77. Section 200 should be con-
strued in the same way as those enactments. Up till 1906, the
provincial election law was such that if, upon a scrutiny, it was
found that a person not entitled to vote had deposited a ballot
paper, it could be traced and inspected by the Court and re-
jected. There was and is no lawful way of doing so in municipal

XXVI.]

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355

or Dominion elections, nor since 1906 in provincial elections.
Thus it was the declared policy of the Legislature that, in case
of necessity, upon a scrutiny there should be no secrecy for an
invalid vote. Yet, side by side with that policy, there was this
broad provision that “no person” who voted should be “re-
quired to state how he voted. ” It is not even limited by saying
“no voter.” To some extent, it might be said that the very
provision for unearthing the ballot would indicate that the
voter could not be asked what it would shew. In rendering the
ballot now untraeeable legally in provincial elections, a scrutiny
has not been done away with (see sec. 24, already referred to) ;
and the necessity for evidence of some other sort as to the
marking of the ballot is greater ; but the wording of the section
protecting the voter remains the same, and must still have the
same interpretation. Indeed the change has emphasised the
policy of secrecy. But the fact that, when the provincial Act
37 Viet. ch. 5, sec. 32, was enacted, entitling the voter to keep
silent, the law made other provision for obtaining the evidence,
is, I think, a reason for giving the Ontario law even a more
liberal and not a less liberal interpretation in favour of the
voter than the Dominion law which had the same wording.

C. A.
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Lorne

Scrutiny.

Magee, J.A.

The Ontario municipal provision (now sec. 200) should have
the same interpretation as that in the Ontario Election Act.
Until the case of the Orangeville by-law, 20 O.L.R. 476, the pre-
cise question here does not seem to have arisen. There have been
several cases in which lawful voters were not allowed to be asked
or to state on oath how they had marked their ballots. In the
Lincoln Election Case , 4 A.R. 206, it is pointed out that the
protection of the statute is around the voter until his vote is
proved invalid — but it was not absolutely decided that, if in-
valid, the protection would be removed. I fully agree with the
view of Mr. Justice Britton in the present case (25 O.L.R. at p.
296), that, as a vote may have been given in perfect good
faith, although it turns out that the right to it did not exist, it
is important that, unless the law clearly provides otherwise,
the person honestly casting it should have the benefit of secrecy.
The opinions given upon the Dominion Act, although referring
to rated votes, are wide enough in their terms to include those

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[VOL.

turning out to be invalid ; and, if voters willing to tell how they
voted are excluded from doing so by the policy of the law, much
more should those who, as probably in this case, would be un-
willing to do so. I am of opinion that they cannot be asked.
There is much, however, to be said in favour of the contrary
view. In the United States the result of decisions is thus stated
in 15 Cyc. 424, under “ Elections:” “And it would seem that
the same considerations of public policy which relieve the voter
himself from being compelled to testify for whom he voted
should prevent other proof of that fact. But this protection is
extended to legal voters only. When it has been established that
a voter was not a legal elector, any person having requisite
knowledge may testify as to the person for whom he voted, and
he may be compelled himself to disclose for whom he voted, un-
less he claims the other and different privilege of refusing to
criminate himself. . . . According to the weight of authority
the exemption from obligation to disclose the character of his
vote can be claimed only by the voter himself. But on the other
hand it has been held that in an election contest voters cannot
testify at all as to how they voted. Where it does not appear
from direct testimony for what candidate an unqualified voter
voted, the fact may be shewn by circumstantial evidence. ”

The fourth question is one which might arise upon any
Dominion, provincial, or municipal election, as well as upon any
by-law. It is not certain and cannot be made certain how any
of the 5 illegal votes were cast. They may have been in favour
of the by-law. If so, it would only have 137 supporters, and
therefore not the requisite three-fifths. If any one of the 5
voted against it, then it would certainly have 138 against a
possible 91, which would be sufficient. On the affidavits there
is every probability that at least two, who were well known
opponents, voted against it, but probability is not enough. The
question turns upon the issue involved.

In the Lincoln case, 4 A.R. 206, at p. 212, the Court said:
“The solution of this question seems to follow from a con-
sideration of the issue raised. The respondent has been re-
turned as duly elected. The petitioner, in claiming the seat
for Mr. Neelon” (the unsuccessful candidate), “undertakes to

XXVI.]

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prove that he received the majority of legal votes. That pro-
position he is hound to establish affirmatively. Where it is
sought to diminish the majority of the respondent” (Mr.
Rykert, who had been returned as elected) “by a vote, two
things must be proved : firstly, that the voter had no vote ;
and secondly, that he assumed to vote for the respondent. In
the case put, the second is incapable of proof, and the peti-
tioner therefore fails to prove that the vote was cast for Rykert
and not for Neelon. ” Similarly in the United States the result
of the authorities is thus stated in 15 Cye. 416 : “In a statutory
contest at the suit of a defeated candidate, the certificate of
the board of canvassers is primd facie evidence of the result,
and the contestant, whatever may be his ground of complaint,
has the burden of establishing it. Where the validity of the re-
turns is not attacked on the ground of fraud, it is not enough
to shew that illegal votes were cast; it must be shewn that a
sufficient number of such votes were cast for the successful
candidate to change the result.”

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Lorne

Scrutiny.

Magee, J.A.

If the scrutiny could be looked upon as an appeal from the
clerk’s certificate that the by-law was carried, and as an affirma-
tive assertion that more than two-fifths voted against it, then
this case w T ould be governed by the principle of the decision in
the Lincoln case, and the onus would be upon the opponents of
the by-law to shew that the clerk ’s return was wrong ; and, fail-
ing affirmative proof of it by shewing that all 5 persons voted
for the by-law, the clerk’s return of 141 against 92 would stand,
except as amended by the Judge by the addition of the one im-
properly rejected ballot.

But the scrutiny cannot, I think, be so looked upon. The
question is not the same as the question between two candidates,
where each asserts that he has been elected, and not merely
that the other has not been elected. The scrutiny may be asked
for by any elector, and he need not even have voted. He has
only to Shew to the Judge reasonable grounds for a scrutiny,
and does not need to assert that a different result should be
arrived at. He simply asks a more certain result. It might be
that mistakes in one polling subdivision would be offset by
those in another, the ultimate result being the same. He might

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'be a supporter of the by-law who believed that a greater major-
ity should be declared. In such a case, he should not be deemed

West

Lorne

Scrutiny.

to be asserting that the bad votes were cast against the by-law,
and, because he failed in proving it, meet the result that they
should be assumed not to have been against it. The petitioner

Magee, J.A.

for a scrutiny does not, I think, raise any issue other than the
original one — whether or not three-fifths of the legal voters
have decided for the by-law — although he does render himself
liable to costs.

Such a petitioner is not in the same position as one making
an application to quash a by-law. It might well be that the
onus would be upon the latter to shew that the by-law was
defeated; and, if he failed in affirmative proof, the by-law
would stand. Whatever the result would be upon such an appli-
cation to quash, upon a scrutiny under sec. 369 the whole ques-
tion is open, and the Judge is not to inquire merely as to the
allegations made in the petition to justify the scrutiny; but,
having been satisfied that there was reasonable ground for one,
he is, under sec. 371, to determine, not the truth of those allega-
tions, nor the truth of the clerk’s return, but “ whether the
majority of the votes given is for or against the by-law” — that
is, the necessary majority of legal votes — and he is to certify
the result to the council. The Judge can arrive at the result
only upon the evidence before him, which is here that five per-
sons voted who should not have done so, and they may or may
not all have voted for the by-law; and, therefore, he cannot
say that it has been carried.

In my opinion, therefore, the prohibition should not have
been granted, and the appeal should be allowed without costs.

I regret to have to come to this conclusion in this case, be-
cause there is every reason to believe that the by-law was law-
fully carried; but it rests with the Legislature to say whether
it will permit evidence as to the way in which illegal voters
marked their ballots. The result of the present condition of
the law is, that a man who has no vote may first have his vote
added to those opposing a by-law, and then deducted from the
number of those supporting it, and thus count twice as much as
that of the lawful voter.

XXVI.] ONTARIO LAW REPORTS.

Meredith, J.A. (dissenting) : — This case involves the ques-
tion whether a scrutiny, under sec. 369 of the Consolidated
Municipal Act, 1903, is a scrutiny of votes polled, and conse-
quently a controverted election trial; or is, as it purports to be,
a scrutiny of “ the ballot papers” only.

The question arose in the case of In re Local Option By-law
of the Township of Saltfleet, 16 O.L.R. 293, in which a Judge
had held that the enactment meant no more than it, in plain
words, said — “a scrutiny of the ballot papers:” but, upon an
appeal to a Divisional Court, that ruling appears to have been
differed from to some extent, but to just what extent is not
made very plain. Boyd, C., dealt with the question in an
addendum only to his judgment, in which he intimated that the
case had not been very fully argued. Mabee, J., agreed with
him, without giving any reasons: but Magee, J., dealt with

this question at considerable length, and went the full length
of holding the scrutiny to be an unlimited scrutiny of the votes
polled.

For several reasons, I am quite unable to agree with him in
| that conclusion.

In the first place, it is in the teeth of the plain and simple
words of the legislation, “a scrutiny of the ballot papers and
I decline to attribute to the Legislative Assembly a lack of
knowledge of the meaning of such words, under any circum-
stances; but the more so, because, when a scrutiny of votes
polled has been so meant, that representative body has found
no difficulty in providing for it in quite appropriate words : see
sec. 76 of the Ontario Controverted Elections Act, R.S.O. 1897,
Ch. 11 : the words there employed being, ‘ ‘ a scrutiny of the votes
polled at the election.” It will be found safer, in all cases, to
attribute to the Legislature as complete a knowledge of plain
English as that which most of us possess.

In the next place, if this be not a scrutiny of the “ papers ”
only, but, in truth, a controverted election trial, then a special
tribunal is constituted for the trial of such a case, and, accord-
ing to the general rule, the finding of such a tribunal is not
subject to review elsewhere, unless some provision for appeal
or review is made in the legislation, and there is, in this legisla-

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tion, no such provision in any shape or form. I cannot think that
any one will seriously contend that the Legislature meant that
the judgment of a single County Court Judge, upon such a pro-
ceeding, should be final and conclusive as to the validity of any
by-law — money or local option — which may be the subject of the
voting, the ballot papers of which are to be so scrutinised. On the
other hand, if such general rule is not to apply — and generally
the cases seem to have been dealt with as if it did not — then we
should have the farce of a costly scrutiny to no binding pur-
pose; a costly scrutiny to be gone over anew in any attack
which might be made upon the by-law in the usual way. So
that, whichever way it is looked at, it seems hardly possible that
reasonable men could have desired such an effec.t. Whilst, if
the scrutiny be restricted to the ballot papers — in the nature
of a recount — it would be quite reasonable, and quite in accord
with the provisions for a speedy recount, which, by legislation,
is now commonly given after all elections.

Again, the proceedings must be commenced within the usual
time for beginning recount proceedings, fourteen days after the
declaration of the result of the poll; whilst the time-limit for
motions to quash is, generally speaking, not less than a year.
Preparing for a scrutiny of the votes would ordinarily require
more time than preparing for attacking the by-law on other
grounds; and, beside this, no provision is made for notice of
objections to voters; nor is there anything to indicate, in any
manner whatever, that the qualifications of voters, specially to
be objected to, or the qualification of every voter who voted, is
to be, or may be, inquired into in this hurried fashion: on the
contrary, the Judge is to proceed upon an “ inspection of the
ballot papers not an inquiry into the qualification of voters,
and upon such evidence as he may deem necessary — evidence as
to ballot papers, not as to qualification of voters, which, upon a
scrutiny of votes polled, would not be in the mere discretion
of the Judge, but would be such admissible evidence as the
parties saw fit to adduce.

And again, the ruling in the Salt fleet case has been frequently
questioned, so that hitherto the weight of judicial opinion
greatly preponderates against the view that a scrutiny of ballot

XXVI. ]

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papers is a scrutiny of the votes polled, involving an inquiry
into the qualifications of the voters.

And lastly, even if the words be considered of doubtful im-
port, is a Court of such extensive jurisdiction, and one of such
extraordinary power — whether wholly conclusive or wholly in-
conclusive, as I have before mentioned — to be created on doubt-
ful language?

C. A,
1912

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Lorne

Scrutiny.

Meredith, J.A.

And, if this is not enough, look at the result : the by-law is
to be judicially declared to have been defeated at the poll —
with all the binding consequences of such a defeat of a local
option by-law at the polls — though in truth it may have been,
and in all probability was, carried: an injustice arising wholly
from a disregard of the plain words of the legislation; an un-
fortunate attempt to improve upon well-considered legislation.
Let the scrutiny be, as the Legislature has plainly said, of the bal-
lot papers, and you have certainty, finality, and justice : certainty
and finality in the County Court Judge’s scrutiny of the ballot
papers, and justice from the ordinary courts, with the usual
rights of appeal, in making the scrutiny of the qualifications
of voters, and in, in such a case as this, setting aside the by-law
because of the inconclusive character of the poll; leaving it to
the contestants to try it over again if they choose to; which is
the only just consequence of an indecisive election poll or any
race.

Against all these, and other, reasons for treating the Legisla-
ture as if its members knew the meaning of plain words, these
things have been urged : —

In the first place, it is said that the provision, contained in
sec. 372, giving to the Judge, upon the scrutiny, the like power
and authority as those which he has upon the trial of the validity
of an election, shews that each is really an election trial. But
there is no warrant for any such contention: the power and
authority is expressly limited to matters properly ‘ ‘ arising upon
the scrutiny. ’ ’ It was necessary to confer power and authority
to enable the Judge to prosecute the inquiry, and, “upon in-
specting the ballot papers,” to determine, in a summary man-
ner, “whether the majority of the votes given is for or against
the by-law”, and what shorter or better method could be

362

ONTARIO LAW REPORTS.

C. A.
1912

West

Lorne

Scrutiny.

Meredith, J.A.

[VOL.

adopted than in saying that, so far as they are applicable to a
scrutiny of ballot papers, the procedure upon an election trial
shall be applicable, as this section in effect provides ?

Then it is said that the Legislature could not have meant
a mere recount, because it had, in an earlier section of the Act,
provided for a recount in municipal elections (sec. 189) : and
had, by another section (sec. 351), made this section applicable
to voting on money and local option by-laws. But, in truth,
that is not so; nor, if it were, would such a consequence neces-
sarily follow. Under section 351, secs. 138 to 206, except sec.
179, are incorporated with the provisions respecting the poll in
regard to money by-laws; and local option by-laws are, under
the local option enactments, put in the same category as money
by-laws; but those sections are so incorporated only in “so far
as they are applicable;” and the rule is, that, where a special
enactment provides for a certain case, the provisions of a gen-
eral enactment covering it also are inapplicable : so that, here,
it seems to me to be plain that, the provision of sec. 369 specially
applying to such a by-law, sec. 189 is inapplicable, and so ex-
pressly excluded under the plain words of sec. 351. And there
is abundant reason for that, for money by-laws are by-laws of
the most important character, and the provisions of sec. 369
are of a wider and more protective character than those of sec.
189 ; the one is a scrutiny of the ballot papers, the other a re-
count of the votes only. Upon a scrutiny of the ballot papers
the question of the validity of each ballot may be inquired
into; a thing of no small importance when the corrupt dealing
with ballot papers, even by sworn election officers, which has been
only too frequently proved in election cases some time ago, is
borne in mind.

And, lastly, it is said that the Legislature has used, else-
where, the words “ballot papers” and “votes” indiscriminately,
and so may be taken to have meant a scrutiny of the votes
polled, and a scrutiny of the widest character respecting such
votes, when it has said only that it shall be a scrutiny of ballot
papers. Again I challenge both the accuracy of the statement
and the logic of the conclusion if the statement were true. Sec-
tion 189 is again appealed to; but, instead of that section prov-

XXVI. 1

ONTARIO LAW REPORTS.

363

ing indiscrimination, from the beginning to the end of it it shews
a clear discrimination, knowledge, and expression of the obvions
difference between votes polled and ballot papers. The Jndge
is to examine the ballot papers and recount the votes recorded
upon them ; and this discrimination is shewn throughout the
section, with one possible exception, which appears in sub-section
(6), where the words “recount all the votes or ballot papers”
are used ; but even these words shew a discrimination, and would
be very exact if the word “or” were “and,” because not only
is it necessary to count the votes but also to count the ballot
papers, unused and rejected, as well as used and become evidence
of a vote. If the Legislature knew not the difference between
a vote and a ballot paper, why use both expressions ? The error
in asserting that the words “ballot paper,” as used in sec. 369,
mean vote, ought surely to be evident when it is borne in mind
that there are unused ballot papers which must be scrutinised
and counted, as well as, also, used and spoiled ballot papers, to
be so dealt with ; as well as any corruptly substituted or corruptly
marked or re-marked ballot papers; for the whole subject of
ballot papers comes within the scrutiny under sec. 369, though
not within the recount under sec. 189.

I can, therefore, find no excuse for attributing to the Legis-
lature want of knowledge of the meaning of the plain and simple
words “ballot papers;” and I venture to assert that no existing
enactment gives any sort of excuse for doing so.

If this be so, then the County Court Judge had no power to
enter upon a scrutiny of the votes in regard to the qualification
of the voters, and was rightly prohibited from doing so ; and it
is quite immaterial that the grounds upon which the order was
made were erroneous.

The next question considered by the Divisional Court was,
whether the voters in question were qualified to vote ; but I am
at a loss to understand what power there was to deal with such
a question in prohibition proceedings: if the County Court
Judge had jurisdiction to enter upon such an inquiry, whether
he reached a right or a wrong conclusion is surely not a ques-
tion that can be dealt with in prohibition ; prohibition is directed
against an usurpation of jurisdiction only : we must not assume

C. A.
1912

West

Lorne

Scrutiny.

Meredith, J.A,

364

ONTARIO LAW REPORTS.

C. A.
1912

West

Lorne

Scrutiny.

Meredith, J.A.

VOL.

the power which would rest only in a court having appellate
jurisdiction over such proceedings; and, as I have before inti-
mated, no appeal is given from the County Court Judge.

But, as a majority of the members of this Court considers
that there is power here to consider the question, I am bound to
accept that view and to express my opinion upon it; and my
opinion is, that upon this question also the order of the Divi-
sional Court was right ; but I would support it also on different
grounds.

Whether these voters were qualified or not depends upon
sec. 24 of the Ontario Voters’ Lists Act, 7 Edw. VII. ch. 4.

The names of all of them appeared as duly qualified voters
in the certified list of voters referred to in that section, which
provides that such list shall, upon a scrutiny such as that in
question, be final and conclusive as to such qualification to vote.
There can be no doubt, nor is there any dispute, as to that ; but
it is contended that, under sub-sec. 2 of that section, such per-
sons as these voters are taken out of its provisions. The sub-
section is in these words: “2. Persons who, subsequently to the
list being certified, are not or have not been resident either
within the municipality to which the list relates, or within the
electoral district for which the election is held, and who by rea-
son thereof are, under the provisions of the Ontario Election
Act, disentitled to vote : ’ ’ and, under the section itself, such per-
sons are excepted out of its provisions.

But, how is it possible to bring these voters, at a municipal
poll, within its provisions? As plain as any words in the Eng-
lish language can make it, this exception applies only to voters
at a provincial election; those who, by reason of such non-
residence, under the provisions of the Ontario Election Act, are
disentitled to vote.

It is said that non-residence in a municipality does not dis-
entitle under the provisions of the Ontario Election Act, that it
is enough under it that the residence be within the electoral
division: but what has that to do with the question? To say
that, because this provision cannot be made wholly applicable
to that which alone the Legislature has said it shall apply, any
Judge may apply it to something else, to which he may think it

XXVI.]

ONTARIO LAW REPORTS.

365

ought to have been made applicable, but obviously has not, is
surely legislation, not adjudication. We ought not to forget that
we are not now legislators, nor even here acting as statute-
revisers.

Can any one, in reason, say that the sub-section is not limi-
ted to those who are disentitled under the Ontario Election Act :
and can any one in reason say that any of these persons are so
disentitled Surely not.

Nor is the sub-section inapplicable to those to whom it is so
limited. It plainly excepts all those who are disentitled under
the provisions of the Ontario Election Act ; and it is quite imma-
terial whether the disjunctive words “ within the municipality”
are or are not superfluous or otherwise useless.

0. A.
1912

West

Lorne

Scrutiny.

Meredith, J.A.

It may, or may not be, that the Legislature intended to make
the sub-section applicable to municipal elections and other muni-
cipal polls; but that is quite immaterial here, because it is un-
questionably certain that, whatever was intended, that was not
done.

The provisions of sec. 86 of the Consolidated Municipal Act
of 1903, regarding a tenant’s residence, are not repugnant in
any way to those of sec. 24 of the Voters’ Lists Act; if they
were, they would be equally repugnant in respect of other wants
of qualification, such, for instance, as to the voter being a
British subject: the two enactments must be read together, and,
so read, sec. 24 makes the voters’ lists conclusive evidence, upon
a scrutiny, of qualification in all these respects. The qualifica-
tions are all necessary, but the inquiry under the Voters’ Lists
Act is a conclusive consideration of the question of their exist-
ence or absence.

The cases upon this subject have, I think, all been rightly
decided; it is for the Legislature, not the Courts, to cure the
want of expression including municipal electors in sub-sec. 2,
if it see fit.

For a like reason, I am obliged to express my opinion upon
the last question dealt with in the Divisional Court, a question
which I should hardly have thought arguable: to give effect to
the order of Middleton, J., in it, would be to refuse to be guided
by the plain words of legislative enactment, and to fly in the

25 — XXVI. O.L.R.

366

ONTARIO LAW REPORTS. [vol.

C. A.
1912

West

Lorne

Scrutiny.

Meredith, J.A.

face of the whole trend of legislation regarding the secrecy of
the ballot, without any sort of authority for it.

I find it impossible to understand how it can truly be said
that a person who has voted, and whose vote has been counted,
is not a person who has voted, merely because he may not have
been a qualified voter. Effect ought to be given to the plain
meaning of plain language.

The numbered ballot was in force for years in provincial
elections, not for the purpose of ascertaining how good votes
were cast, but for finding out how votes proved to have been
invalid were cast, so that they might be deducted from the
proper side; but even that was considered such a menace to the
secrecy of the ballot that it was wiped out of the statute-law
entirely.

But, if there were not these things against the order made
in this respect, in the first instance, the cure would seem to
me to be worse than the disease : one who, having no vote, voted,
and probably swore “his vote in,” would not be unlikely, when
obliged to say how he voted, to tell an untruth about it ; and so
the double wrong would most likely be done ; the bad vote would
remain on the side for which it was cast, and a good one be
taken from the opposite side. It would be absolutely impossible
to trace the ballot, and highly impossible that any one but the
voter would be able to give any testimony as to the way in
which he actually voted.

Beside all this, shewing how one man, or several men, voted,
may, in some cases, shew how others voted, and absolute secrecy
seems to be needful to give the required feeling of absolute
security ; and nothing should be done to throw doubt upon the ab-
solute secrecy of the ballot, where voting by ballot is in force. To
compel any one to disclose his vote, or rather to answer upon oath
any question as to how he voted, would in another way lead
to the disclosure sometimes of the votes of qualified voters, for
Judges are not infallible; qualified voters may erroneously be
held to be unqualified ; and doubt would, in any case, be thrown
upon that essential of the ballot system, a feeling of absolute
security in absolute secrecy.

I would dismiss the appeal.

XXVI.]

ONTARIO LAW REPORTS.

367

Maclaren, J.A., also dissented, agreeing with the opinion of
Meredith, J.A.

Appeal allowed ; Maclaren and
Meredith, JJ.A., dissenting.

C. A.
1912

West

Lorne

Scrutiny.

[RIDDELL, J.]

Fidelity Trust Co. v. Buchner. 1912

Life Insurance — Benefit Certificate — Beneficiary — “ Adopted ” Daughter — Mav

Death of — Claim by Infant Children of — Rules of Insurance Society — ^

Insurance Act, R.S.O. 1897, ch. 203, sec. 151(3) — Law of Ontario as to
Adoption — 1 Geo. V. ch. 35, sec. 3 — - Preferred Beneficiaries — Endorse-
ment in Favour of Beneficiary for Value — Validity — Evidence — Next
Friend of Infants — Status — Certificate Endorsed as Security for Ad-
vances — Inquiry as to Amount Advanced.

Section 3 of 1 Geo. V. ch. 35 is derived from 12 Car. II. ch. 24, sec. 8, and
carries the law no further than that enactment. Its effect is not to take
away- any of the rights of a father in respect of the custody of his child,
but to enable the father to take away the common law rights of others;
the statute does not exclude the right of the father himself; he cannot
get rid of his parental right irrevocably by an agreement; such a deed
or agreement is revocable, even by will. The law of Ontario, strictly
speaking, knows nothing of adoption; and the term “legal adoption” has
no meaning, in the proper use of the words.

Re Davis (1909), 18 O.L.R. 384, followed.

Re Hutchinson (1912), 26 O.L.R. 113 (since reversed), not followed.

In 1901, R. became a member of a benefit society, the Royal Arcanum, in-
corporated in the State of Massachusetts but doing business in Ontario,
and the society issued- to him in 'Ontario a benefit certificate whereby it
agreed “to pay . . . to L. H. (adopted daughter) a sum not exceeding

$1,500 in accordance with and under the laws governing said fund” — that
is, the beneficiary fund of the society — “upon satisfactory evidence of
the death of said member . . .” L. H. died in 1909, leaving infant

children. Thereafter, R. endorsed upon the certificate, under his signa-
ture and seal, a direction that all benefits thereunder -should be paid to
the defendant, “who for many years has advanced money to me and kept
up the premiums, and who is a holder of this certificate for value.” R.
died a widower and childless in 19.11. The insurance or benefit moneys
were claimed by the defendant under the endorsement, and also by the
plaintiffs (next friend), on behalf of the children of L. H., under the
rules of the society: —

Held, that, as the society was not incorporated under the Benevolent and
Provident Societies Act, R.S.O. 1897, ch. 211, the insurance moneys were
not payable “to the person or persons entitled under the rules” of the
society (sec. 12); sec. 151(3) of the Insurance Act, R.S.O. 1897, ch.

203, was applicable (sec. 147) ; and the rules of the society must give
way to the provisions of the statute so far as inconsistent therewith.

Gillie v. Young (1901), 1 O.L.R. 368, followed.

And held, that the infants were not the designated preferred beneficiaries
of R. ; they were not preferred beneficiaries at all, within the meaning of
the statute, R. not having been their grandfather in a legal sense; and
he made a new beneficiary under the provisions of the law in that regard.

Held, also, that the plaintiffs, as next friend, were not entitled to the in-
fants’ money; and the infants were not entitled to the money in any case.

368

ONTARIO LAW REPORTS.

[VOL.

1912

Fidelity
Trust Co.
v.

Buchner.

Held, also, that the endorsement on the certificate was valid under the
statute; and the plaintiffs’ attack upon it, on the grounds that it was
not read to or by R., and that it was ignored and treated as null and
void by both R. and the defendant until the death of R., failed upon the
evidence; and the defendant was entitled to receive the amount due upon
the certificate, unless the plaintiffs could shew that his advances were
less than that amount.

Semble, that the infants would have been entitled to the money under the
rules of the society, if it had been considered that the rules should prevail.

Issue as to certain moneys paid into Court by a benefit
society.

April 29. The issue was tried before Riddell, J., without a
jury, at London.

W. G. R. Bartram, for the plaintiffs.

J. M. McEvoy, for the defendant.

May 4. Riddell, J. : — T. R. Rhoder, a manufacturer in a
small way in London, took out, on the 29th August, 1901, a certi-
ficate in the Royal Arcanum, whereby that organisation agreed
“to pay ... to Lucy Hendershot (adopted daughter) a
sum not exceeding $1,500 in accordance with and under the
laws governing said fund, upon satisfactory evidence of the
death of said member . . . provided that said member is in

good standing at the time of his death, and provided also that
this certificate shall not have been surrendered by said member
and another certificate issued at his request, in accordance with
the laws of the Order.” (Considerable argument was based upon
the clause “in accordance with the laws of the Order,” but it
is clear that these words refer simply to a certificate subse-
quently to be issued, and that they have no relevance in the
present inquiry.)

Lucy, having been married to W. P. Hendershot, died in
1909, leaving her surviving four infant children and her hus-
band. Thereafter, Rhoder made the following endorsement upon
the certificate : —

“The within named beneficiary, Lucy Hendershot, having
died, I direct that all benefits under the within certificate be paid
to Urban A. Buchner, who for many years has advanced money
to me and kept up the premiums, and who is a holder of this
certificate for value.

XXVI.]

ONTARIO LAW REPORTS.

369

“ Witness my hand and seal this 6th day of July, 1909.
“Witness:

“M. Isabel Blankinship. Thomas R. Rhoder. (L.S.)”

Rhoder died a widower and childless in 1911 ; a claim was
made by Buchner that he was entitled to the amount of the
insurance — a claim was, however, made on behalf of the children
of the deceased “adopted daughter.” The Royal Arcanum paid
the money into Court; the Fidelity Trust Company took out
letters of administration with the will annexed of the estate of
the deceased Rhoder; and, upon application, an interpleader
order was made by the Master in Chambers.

The issue came on for trial before me at the non- jury sittings
at London during the present week — I heard all the evidence
and reserved judgment.

Every suggestion of amendment to the form of the issue was
strenuously combatted by counsel for the plaintiffs; and I must
accordingly deal with the issue exactly as I find it.

In the issue the Fidelity Trust Company are plaintiffs and
Buchner defendant.

“The plaintiffs affirm and the defendant denies: (1) that
. . . infant children of Lucy Hendershot . . . are the

designated preferred beneficiaries of their grandfather . . .

T. R. Rhoder by certificate . . . issued by . . . the Royal
Arcanum . . • (2) that the plaintiffs, as next friend to the
said infants, . . . are entitled to payment out of Court of

the said sum ; ( 3 ) that, in the alternative, . . . the plaintiffs,
as administrators ... of ... T. R. Rhoder, are entitled
to the said sum, notwithstanding the endorsement dated the 6th
day of July, 1909, on the said certificate, in favour of the said
defendant, in that the said endorsement was not read to or by
the said T. R. Rhoder, and was ignored and treated as null and
void by both the said T. R. Rhoder and the said defendant until
the death of the said T. R. Rhoder. . . . And the defendant
affirms and the plaintiffs deny: (1) that the said defendant is
the owner of the . . . certificate and entitled to the proceeds
. . . paid into Court by virtue of the fact that the said insur-
ance certificate is personal property reduced into possession by
the defendant, and owned by him as an innocent purchaser for

Riddell, J,

1912

Fidelity
Trust Co.
v.

Buchner.

370

ONTARIO LAW REPORTS.

Riddell, J.

1912

Fidelity
Trust Co.
v.

Buchner.

[VOL.

value, and by virtue of an endorsement upon the said certificate
made by T. R. Rhoder to . . . Buchner for value; (2) that

the defendant is entitled to the said sum paid into Court as the
proceeds of the said certificate.”

The claim on behalf of the infants is based upon the rules of
the society. Section 332 says : “ In the event of the death of all
the beneficiaries designated . . . before the decease of such

member, if he shall have made no other or further disposition
thereof, as provided in the Laws of the Order, the benefit shall
be disposed of as provided in section 330. . . .” As sec. 326
provides that a certificate shall not be made payable to a creditor,
or be held or assigned in whole or in part to secure or pay any
debt which may be owing by the member; and sec. 327 provides
that any assignment of a benefit certificate by a member shall
be void: it is argued for the plaintiffs that the member has not
made a disposition “as provided in the Laws of the Order,” and,
consequently, by the provisions of sec. 332, sec. 330 applies. This
is as follows: “If at the time of the death of a member . . .
any designation shall fail for illegality or otherwise, then the
benefit shall be payable to the person or persons mentioned in
class first, sec. No. 324, if living, in the . . . order of prece-
dence by grades as therein mentioned, the persons living of each
precedent grade taking in equal shares per capita, to the exclu-
sion of all persons living of subsequent enumerated grades, ex-
cept that in the distribution among persons of grade second the
children of deceased children shall take by representation the
share the parent would have received if living. . . .”

Section 324: “A benefit may be made payable to any or more
persons of any of the following classes only : —

“Class First,

“Grade 1st. — Member’s wife.

“Grade 2nd. — Member’s children and children of deceased
children and member ’s children by legal
adoption.

‘ ‘ Grade 3rd. — Member ’s grandchildren. ’ ’

(Enumerating 13 grades.)

‘ ‘ In either of which cases, no proof of dependency of the bene-
ficiary designated shall be required; but in case of adoption.

ONTARIO LAW REPORTS.

371

ptvi.

proof of the legal adoption of the child or the parent designated
as the 'beneficiary, satisfactory to the Supreme Secretary, must
be furnished before the benefit certificate can be issued.

“ Class Second.

“(1) To the affianced wife . . .”

(Enumerating five grades.)

If (a) the deceased Mrs. Hendershot was the member’s child
* ‘ by legal adoption, ’ ’ within the meaning of grade second of class
first in sec. 324; (6) the member did not make any “other or
further disposition” of the certificate, “as provided in the Laws
of the Order;” and (c) the provisions of the Laws of the
Order are to prevail — it is, to my mind, clear that the children
are entitled to the money.

It is argued by the defendant that Lucy Hendershot was not
a child “by legal adoption.”

In Re Davis (1909), 18 O.L.R. 384, at pp. 386, 387, it is
said, “The law of England, strictly speaking, knows nothing of
adoption;” and “parents cannot enter into an agreement legally
binding to deprive themselves of the custody and control of their
children; and, if they elect to do so, can at any moment resume
their control over them.” In Re Hutchinson* (1912), 26 O.L.R.
113, at p. 115, apparently doubt is cast upon these propositions —
and it is suggested that the decision in Re Davis was as it was
because the attention of the Court was not directed to the Act
1 Geo. Y. ch. 35, sec. 3, taken from R.S.O. 1897, ch. 340, sec. 2.
Of course, 1 Geo. Y. ch. 35 had not been passed when Re Davis
was decided: but the statute from which it was ultimately de-
rived had been in force in England for two hundred and fifty
years and in our country since Upper Canada became a Province,
if not before: Anon. (1858), 6 Gr. 632; Davis v. McCaffrey
(1874), 21 Gr. 554; and other cases. It has not given occasion
for many decisions in Upper Canada ; but the law is of every day
application.

Our statute is derived from 12 Car. II. ch. 24, sec. 8, and car-
ries the law no further than that statute. The effect of the
statute is not (I speak with great deference) to take away any

*The judgment of the Chancellor in Re Hutchinson was reversed by a
Divisional Court on the 25th June, 1912: 3 O.W.N. 1552.

Riddell, J.

1912

Fidelity
Trust Co.
v.

Buchner.

372

Riddell, J. (

1912

Fidelity
Trust Co.
v.

Buchner.

ONTARIO LAW REPORTS. [vol.

of the rights of the father, but to enable the father to take away
the common law rights of others — it does not exclude the right
of the father himself, but that of “all and every person or per-
sons claiming the custody or tuition of such child or children
as guardian in socage, or otherwise.” And, accordingly, as
Lord Esher says in The Queen v. Barnardo (1889), 23 Q.B.D.
305, at pp. 310, 311, “The parent of a child, whether father or
mother, cannot get rid of his or her parental right irrevocably by
such an agreement. ... As soon as the agreement was re-
voked, the authority to deal with the child would be at an end. ’ ’

The statute is considered in Blackstone, vol. 1, p. 362; Co.
Litt. 88(5), and Hargrave’s notes; Eversley, 3rd ed., pp. 618,
619, 620, 622, 646, 743, 744; Simpson, 3rd ed., pp. 95, 105, 111,
113, 183, 184, 186, 188 sqq. And I do not find any case or text
in which it has been thought that the statute applied except after
the death of the father.

The ordinary rule is, that there cannot be a guardian in the
lifetime of, the father: Ex p. Mountfort (1808), 15 Yes. 445;
Barry v. Barry (1828), 1 Molloy 210; Davis v. McCaffrey , 21 Gr.
at p. 562.

But, not to press that point, a deed under the statute has
been called by Lord Eldon, L.C., “only a testamentary instru-
ment in the form of a deed:” Ex p. Earl of Ilcherster (1803),
7 Yes. 348, at p. 367. Such a deed has been held, from within a
few years of the passing of the statute, to be revocable even by a
will.

In Shaftsbury v. Hannam (1677), Finch’s Reports (not
Finch’s Precedents) 323, the dispute was between the plaintiffs,
claiming under a deed poll, and the defendant, claiming under
a subsequent will. The Lord Chancellor, Lord Nottingham,
held that the widow seemed to have a great probability of law
on her side, and refused to disturb her in her guardianship, un-
less she refused to prove that she was not excluded by the terms
of the statute (referring to difference of religion — now of no
consequence, and, happily, but of interest historically).

In Lecone v. Sheires (1686), 1 Yern. 442, Lord Jeffreys, L.C.,
would not allow the removal of a guardian appointed by deed,

XXVI.]

ONTARIO LAW REPORTS.

373

where the deed contained a covenant not to revoke, and the de-
ceased parent had died in debt to the guardian so appointed.

In Ex p. Earl of Ilchester, 7 Ves. 348, Lord Eldon, L.C., says
(p. 367) : “The question takes this turn; whether, as it is neces-
sary under the statute, that the instrument, whether a deed,
which I take to be only a testamentary instrument in the form
of a deed, or a will, should be executed in the presence of two
witnesses ... it is therefore also necessary, that any instru-
ment revoking that shall be executed in the presence of two wit-
nesses. . .” Thus making no distinction between the case of

a deed and of a will, either being revocable.

I cannot find any contrary intimation or suggestion of opin-
ion as to the meaning and effect of the statute. See also I Cyc.
917.

The English law is substantially the same as ours, and the de-
cisions there are of authority with us — and I am unable to recant
the opinion, expressed in Re Davis, that the law of Ontario,
strictly speaking, knows nothing of adoption. As the Chancellor
has not actually decided to the contrary, I am at liberty to follow
my own judgment.

It follows that in Ontario there can be no “legal adoption, ”
in the strict and proper use of the words, as there can be in many
of the States of the Union : 1 Cyc. 918. The Royal Arcanum is
an organisation which covers many of the United States, as well
as Canada ; and its rules are made of general application.

No doubt, it was in view of the difficulty of framing any
general rule as to “legal adoption ” that the determination of the
fact of “legal adoption’ ’ was left to the Supreme Secretary (sec.
324), and the provision was made that the proof of legal adop-
tion was to be satisfactory to the Supreme Secretary. In my
view, the Supreme Secretary was made the judge as to “legal
adoption” — particularly in a country where “legal adop-
tion” has no meaning in the proper use of the words. I think
his decision is final. In our Province, I think that what the
Supreme Secretary decides to be “legal adoption” is “legal
adoption” for the purposes of the insurance — no statute or other
law of the Province being violated.

As the benefit certificate cannot be issued until the Supreme

Riddell, J.

1912

Fidelity
Trust Co.
v.

Buchner.

374

ONTARIO LAW REPORTS.

Riddell, J.

1912

Fidelity
Trust Co.
v.

Buchner.

VOL.

Secretary is satisfied, it must be taken that the Supreme Secre-
tary has decided that Lucy Hendershot was the adopted daugh-
ter, or to use the words of the rules, the child by legal adoption,
of the member: Ancient Order of United Workman of Quebec v.
Turner (1910), 44 S.C.R. 145.

(b) I think it equally clear that Rhoder made “no other or
further disposition thereof as provided in the Laws of the
Order ; ’ ’ sec. 327 makes an assignment void, and sec. 326 declares
that a certificate is not to be held or assigned to secure or
pay any debt ; and the provisions of sec. 333, permitting a change
of beneficiary to be effected by surrender of certificate and pay-
ment of a small fee, have not been taken advantage of.

( c ) The defendant appeals to the Act of 1904, 4 Edw. VII.
ch. 15, sec. 7 : but that has no application — it applies only in the
case of preferred beneficiaries — husband, wife, children, grand-
children, or mother : R.S.O. 1897, ch. 203, sec. 159 ; and adopted
children are no more “ children ” than are godchildren, or than
the “wife” in Crosby v. Ball (1902), 4 O.L.R. 496, or Deere v.
Beauvais (1906), 7 Q.P.R. 448, was a wife.

The statute to apply is R.S.O. 1897, ch. 203, sec. 151(3):
“The assured may designate . . . the beneficiary . . -.
and may ... by the . . . like instrument from time to
time . . . alter . . . the benefits ... or substitute
new beneficiaries . . . .” (6) “And if all the beneficiaries
die in the lifetime of the assured . . . the insurance money

shall form part of the estate of the assured. ’ ’ This is applicable
to the Royal Arcanum: sec. 147. The Royal Arcanum is not a
society incorporated under R.S.O. 1897, ch. 211 (an Act respect-
ing Benevolent, Provident, and other Societies), so as to be
entitled to pay the insurance money “to the person or persons
entitled under the rules thereof:” ch. 211, sec. 12. The incor-
poration was in Massachusetts in 1877, under the provisions of
the laws there in force, substantially as in ch. 115 and ch. 106 of
the Public Statutes, 1881.

Its position is, therefore, in the view of our law, the same
as that any other insurance company — e.g., that of the Catholic
Order of Foresters in Gillie v. Young (1901), 1 O.L.R. 368.
That case decides that the rules of the “Order” must give way

XXVI.]

ONTARIO LAW REPORTS.

375

to the provisions of the statute so far as they are inconsistent
therewith. Mingeaud v. Packer (1891), 21 O.R. 267, S. C.
(1892), 19 A.R. 290, and Be Harrison (1900), 31 O.R. 314, may
also be looked at.

If, then, the declaration endorsed on the certificate has any
validity, the plaintiffs must fail in the issues offered by them.

The grounds of attack upon th6 endorsement are, it will be
seen, two in number: ( a ) that the endorsement was not read to
or by Rhoder; and ( b ) that it was ignored and treated as null
and void by both Rhoder and the defendant until the death of
Rhoder.

As to (a), there is not the slightest evidence that Rhoder did
not fully understand what he was signing; he has signed his
name legibly, and nothing indicates illiteracy in any way ;
letters, indeed, are produced, written by him, shewing the re-
vere. The second ground is equally baseless : considerable testi-
mony was given indicating that the policy was transferred
rather by way of security for a loan or series of loans than the
reverse, but nothing suggests, much less proyes, that the trans-
fer “was ignored” or “treated” as “null and void.”

The above will dispose of the issues offered in the plaintiffs’
claim : —

(1) The infants are not “the designated preferred bene-
ficiaries of their grandfather . . . T. R. Rhoder,” for the

double reason that they are not “preferred beneficiaries” at all,
within the meaning of the statute, T. R. Rhoder not having been
their grandfather in a legal sense ; and, second, he made a new
beneficiary under the provisions of the law in that regard.

(2) “The plaintiffs as next friend to the said infant child-
ren” are not “entitled to payment out of Court of the said sum”
for several reasons. Assuming (what I by no means concede)
that this company can be a next friend at all (RjS.O. 1897, ch.
206, secs. 4, 5, 8; Nalder v. Haivkins (1833), 2 My. & K. 243),
(a) the next friend is not entitled to the infants’ money: Vano
v. Canadian Coloured Cotton Mills Co. (1910), 21 O.L.R. 144;
he is brought into Court simply to protect the infants’ rights
and guarantee the costs: Dyke v. Stephens (1885), 30 Ch. D.

Riddell, J.

1912

Fidelity
Trust Co.
v.

Buchner.

376

Riddell, J.

1912

Fidelity
Trust Co.

Buchner.

ONTARIO LAW REPORTS. [vol.

189, at pp. 190, 191; Smith v. Mason (1897), 17 P.R. 444; and
(&), the infants are not entitled to the money in any case.

(3) The plaintiffs basing their claim to the money specifi-
cally “in that the endorsement was not read,” etc., and “was
ignored,” etc., they fail upon this issue as well.

This by no means disposes of the whole matter. The evi-
dence convinces me that, while the transfer is absolute in form,
it was in fact but security for advances already made and to
be made. The defendant says that he advanced more than the
amount paid into Court ; and I think I should not order a refer-
ence unless the plaintiffs assume the responsibility of asking
for one. The cross-examination of the defendant was not appar-
ently directed to shewing that he had not advanced the amount
he claimed. The plaintiffs as administrators would be entitled to
the proceeds of the certificate less the amount advanced, etc.

If, within ten days from this date, the plaintiffs apply for an
order of reference, such order may go, at their peril as to cists,
referring it to the Master at London to determine the amount
for which the certificate is security in the hands of the defend-
ant. In that fevent, I shall reserve to myself the question of costs
and further directions until after the Master shall have made his
report. If such an order be not taken out by the plaintiffs, I
now find all the issues in favour of the defendant, direct the
plaintiffs to pay all the costs over which I have control, and
order the payment out to the defendant of the amount paid into
Court.

[The plaintiffs accepted the reference offered in the judgment; and an
order was accordingly made referring it to the Master at London to inquire
and report upon the amount for which the insurance certificate and the
assignment thereof were security.]

XXVI.]

ONTARIO LAW REPORTS.

377

[MIDDLETON, J.]

Re Matthew Guy Carriage and Automobile Co.

Company — Winding-up — Directors — Misfeasance — Payment for Services as
Workmen and Clerks — Ontario Companies Act , sec. 88.

Section 88 of the Ontario Companies Act, 7 Edw. VII. ch. 34, providing that
“no by-law for the payment of the president or any director shall be
valid or acted upon until the same has been confirmed at a general
meeting,” applies to all cases in which a by-law is necessary for the
payment, and covers the remuneration of all officers of the company
whose appointment should properly be made by by-law.

Birney v. Toronto Milk Co. (1902), 5 O.L.R. 1, explained and followed.
But there is no warrant for extending the principle to a case in which the
director has acted as a mere workman or clerk, and has been remuner-
ated at a rate not exceeding the real value of the services rendered, at
the ordinary market-price. The section itself does not prohibit the re-
muneration of a director; and the company cannot retain the benefit of
the services rendered by a person employed in a subordinate capacity,
who is also a director, without paying a fair price. If the statute
renders the contract of hiring invalid, directors who have rendered
manual and clerical services have a right to receive a quantum meruit
for those services; and, if they have not received more, cannot be held
guilty of misfeasance.

Burland v. Earle , [1902] A.C. 83, 101, followed.

Re Queen City Plate Glass Co., Eastmure’s Case (1910), 1 O.W.N. 863,
Re Morlock and Cline Limited, Sarvis and Canning’s Claims (1911), 23
O.L.R. 165, and Benor v. Canadian Mail Order Co. (1907), 10 O.W.R.
1091, distinguished.

An appeal by the directors of the company, in liquidation,
from an order of the Master in Ordinary, dated the 1st April,
1912, upon the return of a misfeasance summons, whereby he
directed the directors severally to repay certain sums received
by them from the company in remuneration for services ren-
dered.

May 2. The appeal was heard by Middleton, J., in the
Weekly Court at Toronto.

F. S. Mearns, for certain directors.

W. S. McBrctyne, for other directors.

G. H. Kilmer , K.C., for the liquidator.

May 7. Middleton, J. : — After most careful consideration, I
am unable to agree with the learned Master. I adhere to the
views expressed in Re Queen City Plate Glass Co., Eastmure’s
Case (1910), 1 O.W.N. 863, as to the wide effect to be given to
sec. 88 of the Ontario Companies Act, 7 Edw. VII. ch. 34; but I

1912

May 7

378

Middleton, J.

1912

Matthew

Guy

Carriage

and

Auto-

mobile

Co.

ONTARIO LAW REPORTS. [vol.

think this case entirely different from any of the reported deci-
sions, and falls quite outside the section.

The company was incorporated for the purpose, inter alia,
of manufacturing automobiles. F. M. Guy was a practical
mechanic, and worked at manual labour in the company’s shop,
receiving a weekly wage of $15. Daniels also worked, first in
the factory and afterwards as a stenographer in the office, re-
ceiving the ordinary wage paid to those in like employment.
Walter was employed as a painter and varnisher in the factory.
Armstrong was the company’s bookkeeper. All of these men
had been employed by Matthew Guy, the original owner of the
'business, before it was taken over by the incorporated company;
and a formidable contention is made on behalf of these directors
that it was part of the original understanding, upon the trans-
fer of the business, that the company should assume the existing
contracts with employees ; but I prefer not to base my judgment
upon this aspect of the case.

The section of the statute provides: “No by-law for the
payment of the president or any director shall be valid or acted
upon until the same has been confirmed at a general meeting.”
There is much to be said in favour of the contention put forward
by the appellants, that this section relates to the payment of the
president or director for his services rendered in his official
capacity, and that it was not intended to deal with payments
made to him for services rendered in any other capacity. This
seems to have been the view entertained by Mr. Justice Mere-
dith in Mackenzie v. Maple Mountain Mining Co. (1910), 20
O.L.R. 615, where he says (p. 621) : “The purpose of the enact-
ment is that those who govern the company shall not have it in
their power to pay themselves for their services in such govern-
ment without the shareholders’ sanction,”

But I think that the Courts have adopted a wider view of
the statute, and that it must be taken to apply to all cases in
which a by-law is necessary for the payment, and to cover the
remuneration of all officers of the company whose appointment
should properly be made by by-law.

Birney v. Toronto Milk Co. (1902), 5 O.L.R. 1, is now re-
cognised as conclusive authority for this position. The claim

XXVI.]

ONTARIO LAW REPORTS.

379

there was upon an executory contract by which the plaintiff was
employed as the manager of the company. The holding is, that
the plaintiff could not recover because no by-law for his pay-
ment had been passed and no contract was made under the cor-
porate seal. It was pointed out that the appointment of a man-
ager was an entirely different thing from the appointment of
mere servants or casual or temporary hiring; the latter con-
tracts not necessitating either a by-law or a contract under seal.
It is with reference to such an appointment that Mr. Justice
Street used the words relied upon by the liquidator (p. 6) : “In
my opinion we should hold the section as requiring the sanction
of the shareholders as a condition precedent to the validity of
every payment voted by directors to any one or more of them-
selves, whether under the guise of fees for attendance at board
meetings or for the performance of any other services for the
company. It is not conceivable that the Legislature intended
to forbid the directors from voting small sums to themselves for
their attendance at board meetings, without obtaining the con-
sent of the shareholders, and at the same time to allow them to
vote large sums to themselves for doing other work, without re-
ference at all to the shareholders. The interpretation contended
for by the plaintiff would in fact render the section nugatory,
for nothing would be easier than to evade it. I think the section
should be given a broad and wholesome interpretation, and
that it should be held wide enough to prevent a president and
board of directors from voting to themselves or to any one or
more of themselves any remuneration whatever for any services
rendered to the company without the authority of a general
meeting of the shareholders.”

I have neither the right nor the inclination to narrow this
statement of the law, when rightly understood; but, bearing in
mind that it was spoken of an employment for which a by-law
is necessary, and that the section itself does not prohibit the
remuneration of a director, but merely renders invalid any by-
law, I do not think that there is any warrant for extending the
principle to cases in which the director has acted as a mere
workman or clerk and has been remunerated at a rate not exceed-
ing the real value of the services rendered, at the ordinary
market-price.

Middleton, J.

1912

Matthew

Guy

Carriage

and

Auto-

mobile

Co.

380

ONTARIO LAW REPORTS. [vol.

Middleton, J,

1912

Matthew

Guy

Carriage

and

Auto-

mobile

Co.

I think that the principle applicable is analogous to that
applied to ultra vires contracts, where the company has received
the benefit. It cannot retain the benefit without paying a fair
price. If the effect of the statute is somewhat larger than I
have indicated, and renders invalid the contract of hiring, then
the directors have, as servants of the company, in the discharge
of the manual and clerical services which they have respectively
rendered to the company, a right to receive a quantum meruit
for those services. It is not suggested that they have received
more than this. Therefore, they have not been guilty of mis-
feasance.

I do not find anything in the decided cases opposed to this
view. In Be Queen City Plate Glass Co., Eastmure’s Case, supra ,
repayment was ordered of salary received by Eastmure as pre-
sident; and I refused to recognise any claim based upon a
quantum meruit, because, when services have been rendered by
a director and accepted, no promise to pay can be inferred; his
services, in the absence of the by-law, being deemed to be gra-
tuitous. But here the whole circumstances shew that the wages
were paid as remuneration for labour in the factory and office,
and indicate that it was not intended that the labour should be
gratuitously rendered.

In Burland v. Earle, [1902] A.C. 83, at p. 101, this view
appears to receive the sanction of The Privy Council. J. H. Bur-
land had been secretary. When he became a director, and was
appointed vice-president, he continued to do the same class of
work that he had done as secretary. “He was allowed by the
directors to continue to draw his former salary without any
observation until the present action; and their Lordships think
that the inference may fairly be drawn, from all the circum-
stances of the case, that he was intended to retain his salary,
although there was a shifting of the offices. ’ ’

So here, I think the true intendment was, that, upon the tak-
ing over of these carriage works by the incorporated company,
the former employees were intended to continue to render simi-
lar services and to draw the same remuneration as they had
theretofore received. I do not put this as being part of the bar-

XXVI.]

ONTARIO LAW REPORTS.

381

gain, but as being the result of their continuation in the
employment.

Re Morlock and Cline Limited , Sarvis and Canning’s Claims
(1911), 23 O.L.R. 165, is very close to this case; and, as I
had some doubt whether it might not be regarded as determin-
ing the point in a way opposed to my present view, I availed my-
self of the privilege of discussing it, and Benor v. Canadian Mail
Order Co. (1907), 10 O.W.R. 1091, witji my brother Riddell; and
he tells me that, in his view, these cases are not opposed to the
opinion which I have formed. In the Benor case, a by-law was
clearly necessary; and in the Morlock case, the distinction be-
tween cases in which a by-law is necessary and cases of the
employment of a mere servant was not suggested.

For these reasons, I think the appeal succeeds, and should be
allowed, with costs here and below.

[DIVISIONAL COURT.]

Re Rex v. Hamlink.

[ Prohibition — County Court Judge — Jurisdiction — Convictions under Inspec-
tion and Sale Act, R.S.C. 1906, ch. 85, sec. 321 — Appeal to County
Court under sec. 335 — Time for Hearing and Decision — Extension — *
Powers of Judge — Costs of Appeal — Criminal Code, R.S.C. 1906, ch.
146, sec. 751 — Taxation by Clerk of County Court — Adoption by Judge
— Amendment of Order — Sessions Practice — Discretion.

On the 11th January, 1910, the defendant was convicted by a Police Magis-
trate of three offences against sec. 321 of the Inspection and Sale Act,
R.S.C. 1906, ch. 85. On the 17th January, the defendant appealed,
under sec. 335 of the Act, to a County Court; the appeal came before the
Judge of the County Court on the 7th February; and, upon that day, the
Judge made an order extending for ten days the time for hearing the
appeal. On the 17th February, the hearing was enlarged to the 17th
March; again, to the 22nd March; and upon the 22nd March and 23rd
March the appeal was heard. After argument, judgment was reserved;
and on the 30th April judgment was given and an order made dismissing
the appeal and affirming the convictions, “with costs to be paid by the
appellant to the respondent; such costs to be taxed according to the
scale of costs taxable in this Court, and such costs to be taxed by the
clerk of this Court.” The respondent’s costs were taxed by the clerk on
the 16th June, against the defendant’s protest. The defendant moved
before a Judge of the High Court for an order prohibitin

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